Overview
The U.S. food marketing system links farms to consumers via food manufacturing, wholesaling, and retailing (food stores and foodservice facilities). The cost of marketing services, including transportation, processing, and distribution of farm products, account for a substantial portion of food prices, with the farm value component accounting for the remainder.
ERS monitors important developments in the Nation’s food markets and analyzes related public policy issues:
- Analyses are conducted to inform policymakers about economic issues affecting the competitiveness of the U.S. food sector, including factors related to performance, structure, and marketing.
- Economic analyses of the changing structure and performance of food markets include those related to consolidation, contracting, and vertical coordination.
- Analyses cover other issues relating to the nutrition and health of the U.S. population, including food choices, consumption patterns at and away from home, and food prices.
Features
The U.S. Food Marketing System: Recent Developments, 1997-2006—Significant changes are underway in the structure and performance of the U.S. food marketing system. This report discusses recent fundamental developments in types of food distribution channels, consolidation in food processing and distribution, and strategies used by food companies to move ahead of the competition.
The Impact of Big-Box Stores on Retail Food Prices and the CPI—This report focuses on retail food market dynamics and how they affect food price variation across store formats. Since the current CPI for food does not fully take into account the lower price option of nontraditional retailers, a gap exists between price changes as measured using scanner data versus the CPI estimate, even for the relatively low food inflation period of 1998-2003. This study estimates that the CPI for dairy products overstates food price change by 0.5 to 2.5 percentage points per year for dairy, eggs, and butter/margarine.
How Low Has the Farm Share of Retail Food Prices Really Fallen? —Farmers are capturing more of the consumer's food dollar than previously estimated. Based on updated baskets of food representing what American households bought for at-home consumption between 1999 and 2003, this report estimates farm contribution of retail food prices for two major commodity groups—fresh fruits and vegetables.
Recommended Readings
Let’s Eat Out: Americans Weigh Taste, Convenience, and Nutrition—Whether eating out or buying carryout, Americans are consuming more and more of their calories from full-service and fast-food restaurants. Analysis of a survey of U.S. consumers indicates that respondents want convenience and an enjoyable dining experience, but the desire for healthy food also plays a role.
Structural Change in the Meat, Poultry, Dairy, and Grain Processing Industries—From 1972 to 1992, consolidation and structural change in meat packing, meat processing, poultry slaughter and processing, cheese products, fluid milk, flour milling, corn milling, feed, and soybean processing transformed each industry. Plant size and output per employee rose sharply in all industries, suggesting that technological change was the major driving force. Communities and workers were affected as the number of plants declined by about one-third and the number of employees needed to staff the remaining plants dropped by more than 100,000 (20 percent) in eight industries. The number of plants in poultry slaughter and processing also dropped, but additional jobs were created. 
Taxing Snack Foods:
What to Expect for Diet and Tax Revenues—This
Current Issues in Economics of Food Markets edition examines
the potential impact of excise taxes on snack foods. Such taxes
have been proposed by health policy advocates as a possible way
to address the growing prevalence of obesity and overweight in
the United States. Using scanner data, the study found that relatively
low tax rates of 1 cent per pound and 1 percent of value would
not appreciably alter consumption—and, thus, have little
effect on diet quality—but would generate $40-$100 million
in tax revenues.
See all recommended readings...
Recommended Data Products
ERS food expenditures—This series provides valuable information on how consumers spend their food dollar and how their consumption patterns change over time. ERS estimates current sales or receipts by each type of store that sells food to obtain its aggregate food expenditure series.
Marketing Bill—The marketing bill data series reports on the annual cost for the food sector's marketing services required to process and distribute U.S. farm-originated foods to consumers. The marketing bill reflects changes in product mix, product quantity, product price, and the volume of marketing services.
At-Home Foods by Commodity Group—To shed light on the cost of marketing foods for at-home consumption, ERS compares farm and retail prices for specific food items as well as for baskets of foods by commodity group.
Related Briefing Rooms
Related Links
Bureau of Economic Analysis—Timely annual data on gross output, value added, employment, assets, and capital expenditures for food processing.
Bureau of Labor Statistics—Monthly data on employment, regular and overtime hours for production workers, and hourly earnings for detailed food processing industries in Current Employment Statistics. Monthly price data for food and agricultural products in the Consumer Price Index, the Producer Price Index, and various international price indexes. Annual statistics on productivity and job safety by industry.
Bureau of Transportation Statistics—Details the geographic flows of food and agricultural products in the Commodity Flow Survey, which provides information on transport modes, distances, and shipment sizes by detailed industry and States of origin and destination.
Census Bureau—Wide range of data on food processing, wholesaling, retailing, and foodservice establishments in the Economic Census, conducted every 5 years, which provides information on company and establishment numbers, value added, gross book value, materials usage, sales, and value of shipments by detailed industry and geographic region. Information on concentration by industry, such as share of shipments for the fourth and eighth largest food processing firms.
USDA Grain Inspection, Packers and Stockyards Administration—Annual data on plant numbers and sizes, concentration, and production volumes at cattle, hog, and lamb slaughter plants.
U.S. Securities and Exchange Commission—Annual and other periodic filings of financial data for all publicly-owned firms, available through the EDGAR data base.
Glossary
Defines terms from concentration
to vertical coordination.
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