Don’t Spend It All in One Place! Who Is Pocketing Your Food Dollar?

food dollar

Buying direct from farmers may be the best way to get your food money into your pockets, but most of us can’t lay hands on all our groceries that way, and as the last article showed, most farmers aren’t making a living that way, either. So, what’s the picture like overall? How much of your food dollar, on average, does make it into farmers’ pockets?

The USDA has been answering that question for a long time – since the 1940s, when Congress first directed the agency to “measure the cost of marketing U.S. agricultural commodities.” If you’ve ever heard someone say something about how many cents a farmer gets out of every dollar spent on food, it was probably based on that USDA data.

The agency’s Economic Research Service (ERS) just released the latest information, for 2019. In that year, on average, every dollar spent on food put 14.3 cents in farmers’ pockets.

Where does the rest – the “marketing share” – go? Acording to the USDA, “The marketing share is the remainder accruing to food supply chain industries involved in all post-farm activities that culminate in final market food dollar sales.” Those could include food processing, transportation, and even accounting and legal costs.

Just under 15% may not sound like much, and – from the farmer’s point of view – it probably isn’t. It isn’t much below the long-term average, though. Between 1993 and 2019, the farm share of the food dollar ranged from a high of 18.1 cents (1997) to a low of 14.2 cents (2018), with an average of 16.4 cents.

The USDA’s latest release comes with an online app that lets users look at the farm share of the food dollar from various angles – in inflation-adjusted versus nominal dollars, or by different categories of food items – say, cerals, poultry, or processed fruits and vegetables, to name a few. For instance, the farm share of a dollar spent on food eaten at home rings up at 23.4 cents – versus just 4.2 cents when we eat out.

Like the direct sales data discussed in the previous article, everything in the latest release is pre-pandemic – so next year’s food dollar update may show some interesting swings.

The app, the background on the data, and the full dataset are all available from the USDA-ERS website.

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