Food Dollar

Food Processing Industry Accounts for 15.6% of Food Cost

In News, Processing by Krista Garver0 Comments

If you split up the cost of food based on the industries involved in the supply chain, the food processing industry accounts for 15.6¢ of every $1, according to the USDA’s Food Dollar Series.

The series looks where each dollar spent on domestically produced food ultimately ends up. The data are from 2015, which is the most recent year available.

Marketing Bill Dollar

The Marketing Bill Dollar divides the typical $1 food purchase into two pieces:

  • Farm share = 15.6¢ — This is the amount received by farmers from the sale of raw food commodities.
  • Marketing share = 84.4¢ — This includes all post-farm activities.

The shares of the food dollar doing toward the farms and marketing activities has fluctuated on and off since 1993. The marketing share is currently sitting above the average of 83.3¢, but still above the 2002 high of 84.9¢.

Industry Group Dollar

The Industry Group Dollar divides the typical $1 food purchase according to supply chain industry. The food processing industry represents the second biggest piece of the pie, after foodservices.

  • Foodservices = 34.4¢
  • Food processing = 15.6¢
  • Retail trade = 12.7¢
  • Wholesale trade = 9.3¢
  • Farm production = 8.6¢
  • Energy = 4¢
  • Transportation = 3.5¢
  • Other (agribusiness and legal) = 3.5¢
  • Finance and insurance = 3.4¢
  • Advertising = 2.6¢
  • Packaging = 2.5¢

The shares for each industry have also fluctuated since 1993. In general, the portion of the dollar allotted food services has grown steadily. Meanwhile, most of the other industries have seen their shares decline.

Primary Factors Dollar

Finally, the Primary Factors Dollar explores how the food dollar proceeds are distributed.

  • Salary and benefits = 50.1¢
  • Property income = 35.9¢
  • Output taxes = 8.6¢
  • Imports = 5.1¢

Salary and benefits have always claimed the largest portion of the food dollar. Between 2001 and 2013, the share going to salary and benefits declined from a high of 53.1¢ to a low of 48.5¢. Since 2013, this trend has reversed and the salary and benefits share is going up.

Read more about the USDA’s Food Dollar Series and dig into the results here.

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