A Revised and Expanded Food Dollar Series: A Better Understanding of Our Food Costs
by Patrick Canning
Economic Research Report No. (ERR-114) 49 pp, February 2011
For many years, USDA's Economic Research Service (ERS) has
analyzed annual spending by U.S. consumers on domestically produced
food. ERS has published findings from this analysis in a series
known as the marketing bill, which identified the costs of
marketing the raw farm commodities contained in a typical dollar's
worth of U.S.-produced food and the share of the typical food
dollar going to farmers. Measurement problems, the discontinuation
of several underlying data sources, and increased interest in
evolving supply chain relationships prompted ERS to replace the old
marketing bill series with a new expanded data series. This new
series, named the food dollar series, provides a more detailed
answer to the question, "For what do our food dollars pay?"
The New Food Dollar Series
The new food dollar series is composed of three primary series,
each of which provides a different way of slicing the same food
dollar to provide a variety of perspectives:
• The marketing bill series, like the previous series
of that name, identifies the distribution of the food dollar
between farm and marketing shares.
- This series indicates that the costs of marketing farm
commodities to U.S. food consumers were an average of 4 cents
higher per consumer food dollar than was previously reported
between 1993 and 2006. In 2008, the farm share was almost 16
• The industry group series identifies the value added
from 10 distinct food supply chain industry groups to the food
dollar (that is, the marginal contribution of each industry group
to the final food product).
- The farm and agribusiness share in this series differs from the
farm share in the current marketing bill series (and the old
marketing bill) in that it does not include nonfarm value added. In
2008, 4.2 cents of the 15.8-cent farm share was value added from
nonfarm supply chain industry groups, such as energy,
transportation, and financial services.
- This series indicates that payments from each food dollar going
to the energy industry group approached 7 cents in 2008, an
increase of 75 percent since 1998. These estimates are higher than
those provided by the old marketing bill series, which only
measured direct energy use of food processors, retailers, and
• The primary factor series identifies the distribution
of the food dollar in terms of U.S. worker salaries and benefits,
rents to food industry property owners, taxes, and imports.
- This series indicates that U.S. worker salaries and benefits
coming from each food dollar steadily declined from 55 cents to 51
cents between 2001 and 2008.
- Imported ingredients, both food and nonfood, accounted for a
growing share of the food dollar, climbing from less than 5 cents
in 1993 to nearly 8 cents in 2008.
To provide even more information about food supply chains, each
of the three primary series is disaggregated into foodat-home and
food-away-from-home series and into total food expenditures that do
not include soft drinks and alcoholic beverages and total food
expenditures that include them. Interestingly, in the food-at-home
marketing bill series, the farm share of the food dollar remained
around 24 cents from 1993 to 2008, suggesting that increasing
expenditures on food services are behind much of the reduction in
the farm share in the total marketing bill series.
In total, the new food dollar series includes 36 individual
series, created by permutations of the three component series
(marketing bill, industry group, primary factor), with the two
commodity groupings (food/food and beverage), the three expenditure
categories (total, food at home, food away from home), and the two
dollar denominations (nominal, real). The series spans the period
from 1993 to 2008 and will be updated annually.
How and Why Was the New Food Dollar Series
Annual input-output (IO) data for the years 1993 to 2008,
published by the Bureau of Labor Statistics, data from the 1997 and
2002 detailed U.S. benchmark IO accounts, and annual IO data for
the years 1998 to 2008, published by the Bureau of Economic
Analysis (BEA), were compiled and reconciled to produce annual food
marketing bill estimates for the period 1993-2008, using
conventional IO analysis. Supply chain IO analysis determines where
food dollars wind up (as income) by tracing the market value-added
measures for 10 supply chain industry groups and three primary
production factors (labor, domestic industry assets, and imports).
All estimates were reported in both nominal (current price) and
real (inflation-adjusted) dollars.
This new approach to assessing what our food dollars pay for is
superior to the former approach in several important ways:
• The quality, timeliness, and completeness of the new
source data ensures that a complete accounting of the entire food
system is derived from a single consolidated data source.
• A precise approach to measuring and reporting the cost
components of the entire food dollar in the new series avoids the
potentially confusing divisions of the previous marketing bill
• The new food dollar series provides a more complete accounting
of the modern global food system.