Highlights and Interactive Charts

This page provides interactive charts on various aspects of farm-to-retail price spreads:

  • Price spreads for individual food products
  • Farm share of retail price varies across food products
  • Market baskets
  • Changes in farm values can affect retail prices

Food price spreads—the difference between a food’s retail price and the value of the farm commodities used in the food—can fluctuate over time. These fluctuations reflect changes in prices received by farmers for their commodities and/or changes in marketing costs (e.g., costs for processing, wholesaling, and retailing). In 2017, for example, while the national, monthly average price of head lettuce at grocery stores fell 3 cents to $1.03 per pound, the monthly average price received by farmers rose 12 cents to $0.37 per pound. Flooding in California, brought by heavy rains early in the year, delayed the planting and harvesting of head lettuce. Reduced supplies of head lettuce raised farm prices, particularly during the first half of 2017, but this reduction only provided a short-term impact on retail prices.

The following data visualization shows the differences between retail prices and farm values for a variety of individual food products over time.

USDA, Economic Research Service (ERS) also reports the farm share of retail food prices. Estimates are calculated as the ratio of a food’s farm value to its retail price. Farm share estimates are generally larger for less-processed products, such as whole milk and white flour, than for more-processed foods, such as Cheddar cheese and bread. Multiple ingredients are required to produce bread (including flour, high fructose corn syrup, and vegetable oil), and bread must be mixed, baked, and sliced.

In addition, USDA, ERS groups individual foods into market baskets for fresh vegetables, fresh fruit, and dairy products. These baskets contain a collection of foods representing what a U.S. household may buy at retail in one year. The contents of each market basket are available on the Documentation page. The costs of the market baskets at retail are compared with the prices received by farmers for a corresponding basket of agricultural commodities. Grouping foods into baskets yields not only data on particular foods, such as whole milk, but also a composite estimate of the value added by the food marketing system to broadly-defined food product categories, such as all dairy products. Since 2000, the farm share for a basket of 14 dairy products has fluctuated between 24 and 38 percent.

Price spreads from farm to consumer can be used to project how changes in a food’s farm value might affect retail prices, if that change were fully passed on to consumers without any changes in marketing costs. Retail prices for less-processed foods may respond more to farm price changes. For example, if the farm value of a gallon of whole milk was $2 and the retail price was $4, then the farm share would be 50 percent. If the farm value subsequently rose by 50 cents (a 25-percent rise), and if all of the rise was passed through as a retail price increase, then the new retail price would be $4.50 (a 12.5-percent rise).

The following data visualization can be used to see the estimated change in retail prices given a user-determined shock to the farm value of selected food products.