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Ag and Food Sectors and the Economy

The U.S. agriculture sector extends beyond the farm business to include a range of farm-related industries. The largest of these are food service and food manufacturing. Americans’ expenditures on food amount to 13 percent of household budgets on average. Among Federal Government outlays on farm and food programs, nutrition assistance far outpaces other programs.

What is agriculture’s share of the overall U.S. economy?  
Agriculture and agriculture-related industries contributed $835 billion to the U.S. gross domestic product (GDP) in 2014, a 4.8-percent share. The output of America’s farms contributed $177.2 billion of this sum—about 1 percent of GDP. The overall contribution of the agriculture sector to GDP is larger than this because sectors related to agriculture—forestry, fishing, and related activities; food, beverages, and tobacco products; textiles, apparel, and leather products; food service and drinking places—rely on agricultural inputs in order to contribute added value to the economy.
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Food accounts for 12.6 percent of American households’ expenditures  
With a 12.6-percent share, food ranked third behind housing (33.3 percent) and transportation (17 percent) in a typical American household’s 2014 expenditures.  Expenditure shares for the three largest budget categories—housing, transportation, and food—all fell slightly in 2014, while healthcare costs rose from 7.1 percent in 2013 to 8 percent in 2014.
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Agriculture and its related industries provide about 10 percent of U.S. employment  
In 2014, 17.3 million full- and part-time jobs were related to agriculture—about 9.3 percent of total U.S. employment. Direct on-farm employment provided over 2.6 million of these jobs. Employment in the related industries supported another 14.7 million jobs. Of this number, food services and drinking places accounted for the largest share—11.4 million jobs—and food/beverage manufacturing supported 1.8 million jobs. The remaining agriculture-related industries together supported another 1.4 million jobs.
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Food manufacturing accounts for 14 percent of all U.S. manufacturing employees  
In 2013, the U.S. food and beverage manufacturing sector employed about 1.5 million people, or just over 1 percent of all U.S. nonfarm employment. In over 31,000 food and beverage manufacturing plants located throughout the country, these 1.5 million workers were engaged in transforming raw agricultural materials into products for intermediate or final consumption. Meat and poultry plants employed the largest percentage of food and beverage manufacturing workers, followed by bakeries, and fruit and vegetable processing plants.
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Nutrition assistance programs make up the largest share of USDA outlays  
USDA budget outlays increased 34 percent between fiscal 2005 and 2014, with the largest percentage increases in nutrition assistance programs and crop insurance. (Fiscal years begin October 1 and end September 30.) Nutrition-program increases since fiscal 2008 reflected increases in participation and temporary expansion of benefits. The improving economy and expiration of temporary benefits in November 2013 brought nutrition-program outlays down in fiscal 2014. Crop insurance outlays also fell in fiscal 2014, as extreme weather events subsided and crop prices moderated. Commodity program expenditures, down by 74 percent over the decade, increased in the last 2 fiscal years with falling prices, but remain only 6 percent of overall outlays. Together commodity, crop insurance, and conservation programs—those primarily benefiting producers—made up only 17 percent of USDA spending in fiscal 2014.
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Last updated: Wednesday, February 17, 2016

For more information contact: Lewrene Glaser and Rosanna Mentzer Morrison