Where Does Your Food Dollar Go?

January/February 2010 • Category: Features Print This Page Print This Page

Winter is a convenient time to consider the true cost of the food dollar.

Farmers and ranchers currently receive just 19 cents of every dollar spent on food purchases. This is down dramatically from 1980, when farmers received 31 cents of every dollar spent on food.

And while today’s farmers are earning less of today’s food dollar, their expenses are going up. Between 2007 and 2008, farm level production expenses increased by 14.2 percent. With the agriculture industry employing 20 percent of America’s work force, it’s easy to see that the economy is impacted by what happens on the farm.

Consider this point—food prices have actually gone down in relation to economic inflation over the past 100 years. Adjusting the price in today’s dollars to reflect inflation means that today’s wholesale price of 82 cents for a dozen eggs would have cost $10.50 in the early 1900s.

Americans also spend an average of less than 10 percent of their annual income on food, which is down from the greater than 10 percent average that most families spent on food throughout the 20th century. The savings is even greater if compared to the percentage of disposable income Americans spend on food to what people from other countries spend.

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