Follow Your Food Dollars Beyond the Farm Gate

New data from USDA’s Economic Research Service show how each dollar Americans spend on food is divided across the supply chain — from farms to processors, shippers, retailers and restaurants. The takeaway is striking: farmers and ranchers capture only a small fraction of the value created after food leaves the farm.

The Food Dollar Series tracks how much of consumer food spending goes to different industries. As food moves from the farm through processing, packaging, transportation, wholesaling, retail and food service, each step adds labor, services and infrastructure. These activities account for most of the costs built into the final retail price shoppers see.

One of the clearest findings is how small the farm share after accounting for expenses has become. In the latest data, crop producers received about 2.5 cents of every industry food dollar, down from 2.9 cents in 2023. Livestock producers received 3.3 cents, up slightly from 3 cents a year earlier. Combined, farmers and ranchers earned 5.8 cents of every dollar spent on food, essentially unchanged from 2023 and continuing a long-term trend of low farm-level value capture.

Another measure, the farmer’s share of the “food dollar” for domestically produced food, shows a similar pattern. In 2024, farmers received 11.8 cents of every dollar Americans spent on food, down from 12.1 cents in 2023. The remaining 88.2 cents covered the “marketing bill,” which includes everything that happens beyond the farm gate: processing, packaging, transportation, retailing and food service. This shift over time reflects the rising cost and complexity of modern food supply chains and the growing consumer demand for convenience, prepared foods and dining out.

The farmer’s share also depends heavily on the type of food purchased. For groceries (“food at home”), the farm share was 18.5 cents in 2024 — less than one-fifth of what consumers spend.

Products that require little processing return the most value to farmers. In 2024 farmers received the following for each consumer food dollar:

• Fresh eggs: 69.1¢
• Beef: 52.2¢
• Tree nuts and peanuts: 51¢
• Fresh milk: 50.8¢
• Fresh fruits: 39.6¢
• Poultry: 30.4¢
• Fish: 29.3¢
• Fresh vegetables: 26.7¢
• Pork: 23.7¢

These categories reflect foods where the raw agricultural commodity makes up a large part of the final price.

The picture is very different for processed or highly packaged foods. As more work happens off the farm, the farmer’s share shrinks. In the examples below, the farmer’s share of the food dollar is minimal and has declined compared to 2024.

• Cereals: 11¢
• Snack foods: 9.7¢
• Bakery products: 4.8¢

In these categories, most of what consumers pay goes toward manufacturing, branding, packaging and retail margins rather than farm production.

Taken together, the Food Dollar data illustrate a fundamental reality: while farms and ranches provide the essential ingredients for the food system, the vast majority of consumer food spending goes to the activities that transform, transport and sell those products. With crop producers receiving roughly 2.5 cents and livestock producers 3.3 cents of every food dollar, less than 6 cents of value added occurs at the farm level.

At the same time, shifting consumer preferences toward convenience, prepared foods and specialized products, mean more value is created beyond the farm. That trend also creates opportunities. Farmers and ranchers can capture more of the food dollar through value‑added production, direct marketing and partnerships that move them deeper into supply chain activities.

Faith Parum, Ph.D., is an economist at the American Farm Bureau Federation. This column was adapted from “Farmers Receive Less Than 6 Cents of the Food Dollar,” an AFBF Market Intel piece.