Impact of COVID-19 on Agriculture

Farmers’ Share of Food Dollar At Record Low

Market Intel / April 18, 2018

USDA’s Economic Research Service’s Food Dollar Series recently revealed that in 2016 the farmers’ share of the food dollar fell to 14.8 cents, down 4.5 percent from the prior year and the lowest level since the series was launched in 1993. When adjusted for inflation, in 2009 dollars, the farmers’ share of the food dollar was 12.2 cents, down 11.6 percent from 2015 and again the lowest level since the series began. The farmers’ share of the $1 spent on domestically produced food represents the percentage of the farm commodity sales tied to that food dollar expenditure. Non-farm related marketing associated with the food dollar, i.e. transportation, processing, marketing, etc., rose to a record-high of 85.2 cents. 

USDA tracks several other methods of food consumption in the Food Dollar Series. For 2016, the farmers’ share of food consumed at home was 23.6 cents, down 2.9 percent from the prior year. For food and beverages consumed at home, the farm share was 18.9 cents, down 3.8 percent from 2015. The largest decline in the farm share of the food dollar was in food consumed away from home. The farm share of food away from home was 4.4 cents, down 10.2 percent from the prior year. The smaller share of the food dollar consumed outside of the home is attributable to the costs of restaurant food service and preparation. For all but the food and beverage dollar consumed at home and the food at home dollar, the farmers’ share of the food dollar is at record-low levels. 

Contact:
John Newton, Ph.D.
Chief Economist
(202) 406-3729
jnewton@fb.org
twitter.com/@New10_AgEcon
 

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Credit: Mark Jones / CC BY 2.0  

This report showed a total inventory of 11.973 million head for the United States on November 1, up from 2019 and from last month. This 1.3% year-over-year increase is slightly below analysts’ expectations of an average increase of 1.8% in feedlot inventories, but still within the expected range.

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Significant increases and variability in wage rates for the Department of Labor’s H-2A temporary agricultural guest worker program have long been a problem for farmers. For example, during 2019, wage rates under the H-2A program increased by more than 20% in Colorado, Nevada and Utah. In California, wage rates have increased by more than 30% since 2015, and in 32 states the wage rate has increased by more than 20% since 2015. The national average H-2A wage rate increased by 21.2% from 2015, and by nearly 6% in a single year from 2019 to 2020, e.g., 2019 H-2A Sets Records, While a 2020 AEWR Wage Increase Approaches.

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