November 28, 2002

Farmers Percent Of Food Price Keeps Declining

While American consumers spend more than $650 billion on food each year, very little of that value goes back to the farmers who produce the food, according to the U.S. Department of Agriculture (USDA).

USDA's Economic Research Service reports that in 2000, Americans spent $661 billion on food, but U.S. farmers received only 19% of that. And it appears that farmers' decreasing share of the food dollar is a trend. In 1970, farmers received 32% of each consumer food dollar.

So where does the other 81% go? The simple answer is marketing - labor, advertising, processing, transportation, packaging, and other costs. While commodity prices have stayed low, these other inputs drive up retail food costs, which are now expected to increase another 26%, to $869 billion, by 2020.

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