Agriculture Reference
In-Depth Information
The farm-food marketing bill—a perspective on the system
An important part of understanding agribusiness comes from understanding just how and
what consumers spend on food. In 2009, Americans consumers spent $1.2 trillion on food
for at home and away from home consumption—up 95 percent from the $607 billion spent
in 1993 (
Figure 1.1
). A better understanding of just what that spending is all about comes
from looking at the farm-food marketing bill.
The
farm-food marketing bill
breaks down the proportion of the consumer's food dollar
that goes to the farmer for raw products and that goes to the food industry for “marketing”
those raw farm products to end consumers (Canning 2011). Marketing includes the value
added from processing, packaging, transportation, retail trade, food services, energy,
fi nancial and insurance, and other to make agricultural products ready for the consumer.
In 2008, for every dollar spent on food, $0.84 was spent on marketing the product, while
$0.16 went to the farmer (
Figure 1.2
) .
From 1993 to 2009, the farm share of the marketing bill rose from $112 to $187 billion,
while the marketing share has increased by $500 billion to $996 billion (
Figure 1.1
). This
long-term trend refl ects continuing increases in farm productivity (which keeps farm prices
relatively low), the increase in consumer demand for convenient, highly processed food
products, increases in food consumed away from home, and increases in prices for many
components of the marketing bill including labor, transportation, and energy. In turn, this
fuels the steady widening of the food marketing bill as compared to the farm value of con-
sumer food expenditures.
Figure 1.3
identifi es the value added to the consumer food dollar in 2008 by ten different
industry sectors. The farm and agribusiness share represents 11.6 cents of each consumer
food dollar, net of farm costs (Canning 2011). The retail trade and food services sectors
contribute almost half of the value added to the consumer food dollar, at 13.6 and 33.7 cents,
respectively. The food processing sector is 18.6 cents of each food dollar. The 22.5 cents for
1,200
1,000
Consumer expenditure
800
600
Food marketing bill
400
200
Farm value
0
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
Year
Figure 1.1
Farm value and the marketing bill for consumer food expenditures, 1993-2009
Source: Canning 2011 .
