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Farmer share of food dollar declines

June 6, 2018

By American Farm Bureau

Farmers are receiving less of the food dollar than ever before. Micheal Clements has more.

Clements: Recent research from the Department of Agriculture shows that in 2016, the farmers’ share of the food dollar fell to 14.8 percent, down 4.5 percent from the prior year and the lowest level since the Food Dollar Series was launched in 1993. Dr. John Newton, American Farm Bureau Federation market intelligence director, says lower commodity prices and where consumers are purchasing food are driving the farmers’ share of the food dollar lower.

Newton: We see more than 50 percent of the food consumed is actually consumed outside of home based on most recent data from USDA. And the farmers’ share of that food dollar is only about a nickel. So, when the farmers’ share of the food dollar outside of the home is so small, and with more consumers consuming food outside of the home, that pulls the farmers’ share of the food dollar down.

Clements: While the farmers’ share of the food dollar can vary from year to year, Newton says consumers have been consuming more food away from home for decades.

Newton: It’s not necessarily a trend that the farmer has a smaller share of the food dollar. We do see that value move around from year-to-year. But, it is part of a trend that consumers are eating less at home. They’re spending more of their time at restaurants, at fast food chains, and that’s part of a larger trend that we’ve seen now for 20 to 30 years.

Clements: Newton says the farmers’ low share of the food dollar further demonstrates the challenges farmers are currently facing.

Newton: It’s not good news. When you think about where the farm economy is, when you think that net farm income is projected to be at a 12-year low, with the farmer having a very small share of the food dollar, it just indicates how challenging of a time it is in the farm economy.

Clements: Micheal Clements, Washington.

  
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