Farm Share of Food Dollar Continues Downward Trend

By Andi Anderson

The share of the U.S. food dollar received by farmers reached a new low in 2022, dropping to 14.9 cents. This represents a decline of 0.3 cents from 2021 and highlights the long-term downward trend in this crucial metric. Shifting Shares:

• Foodservice Industry: This sector, encompassing restaurants and other dining establishments, witnessed a rise in its share to 34.1 cents per food dollar. This marks the highest share recorded in the USDA's Food Dollar Series.
• Farm Share: Farmers' slice of the food dollar fell to 14.9 cents, covering their operating expenses and input costs.
• Marketing Share: The remaining portion, covering costs associated with getting food from farms to consumers, remained relatively stable.

Reasons for the Trend:

• Increased Foodservice Spending: The growing popularity of dining out contributes to a larger portion of the food dollar flowing towards foodservice establishments.
• Value Added by Foodservice: Restaurants and similar businesses add value to raw ingredients through preparation and service, leading to a higher price paid by consumers.
• Input Costs: The cost of materials, ingredients, and non-farm inputs also influence the overall food dollar distribution.

The Future of the Farm Share:

The long-term decline in the farm share is a concern for many in the agricultural sector. While factors like foodservice spending trends and input costs play a role, understanding the complex dynamics behind the food dollar distribution remains crucial for sustainable agricultural practices and fair compensation for farmers.

• The USDA's Economic Research Service (ERS) uses sophisticated analysis to calculate the farm and marketing shares of a food dollar.
• The food dollar represents the average of all domestic expenditures on U.S. food.
• Annual fluctuations in the food dollar shares can be attributed to various factors like consumer preferences, cost changes, and the balance between dining at home and eating out.

By understanding the evolving dynamics of the food dollar, stakeholders can work towards ensuring a sustainable and equitable system that supports both farmers and consumers.

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