A New Look at Where Our Food Dollars Go

http://www.ers.usda.gov/AmberWaves/June11/DataFeature/

Source: U.S. Department of Agriculture, Economic Research Service
From the report:

The ERS marketing bill has been a popular statistical series for food market observers interested in knowing the costs of getting food from farm to table. The marketing bill series identified the costs of processing and marketing the raw farm commodities contained in a typical dollar’s worth of U.S.-produced food and the share going to farmers. However, it is no longer possible to use the longstanding method for estimating the annual marketing bill because many of the data sources have been discontinued and the estimation procedures do not fully represent today’s food economy.

In February 2011, ERS introduced a new data product called the food dollar series that uses the Bureau of Labor Statistics’ annual input-output tables to provide a more complete accounting of U.S. food spending at both grocery stores and eating places. The new food dollar estimates are composed of three primary series that slice the same food dollar differently to provide a variety of perspectives. The new series spans 1993 to 2008 and will be updated annually.

A comparison of related statistics between the new and older series highlights some important changes in ERS’s assessment of what food dollars pay for:

·       The marketing bill series, like the previous series of that name, identifies the distribution of the food dollar between farm and marketing shares. Like the old series, the new marketing bill series exhibits an increasing trend in marketing costs in most years since 1993. However, the new measure of these costs averaged nearly 4 cents higher per food dollar each year from 1993 to 2006 than estimates of the old marketing bill series. New data and better estimation methods explain this difference.
·       The industry group series identifies the value added, or cost contributions, to the food dollar by 10 distinct segments of the food supply chain. In this series, energy industry cost contributions to each food dollar went from about 4 cents in 1998 to 6.8 cents in 2008 and reflect energy use throughout the food system—from farm inputs to the grocery store or eating place. The old marketing bill series, which only reported energy costs from fuel and electric utilities of processing, wholesaling, retailing, and foodservice companies, indicated these costs were steady at roughly 3.5 cents in 1998-2006. Other energy costs in the old series were embedded in other cost categories. For example, fuel costs for transporting food and ingredients were part of transportation costs.