Wednesday, February 21, 2024

A brief look at the food dollar; Products and production

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By David B. Strickland

PT Processing staff

dstrickland@poultrytimes.com

WASHINGTON — Being an essential expenditure it is understandable that lots of money is spent every year on food products. The USDA Economic Research Service has recently released some money statistics as part of its continuing “Food Dollar Series.”

A whopping statistic is that Americans spent $1.6 trillion on food and beverages, groceries and restaurant visits in 2015, ERS noted.

Of this amount $1.4 trillion was spent on domestically produced food and beverage items, and $200 billion was spent on imported food and beverage goods.

To further mix import and domestic items, some of the domestic food and beverage items produced in the U.S. were produced using items that were imported.

“Domestically produced food and beverages use domestic inputs and embedded imports,” ERS said. “Embedded imports were 5 percent of total U.S. food expenditures in 2015. Embedded imports include both food ingredients, such as Canadian cranberries used in U.S. fruit juice production, and non-food inputs, such as foreign-made cooking equipment and imported fuel used by restaurant owners.”

A dollar — a breakdown

The recent ERS report also looks at an individual dollar and breaks down the amounts individual food production sectors would encompass. Looking at all of the different aspects of the U.S. food supply chain provides an insight to total food costs.

Section breakdowns of a food dollar include:

  • Foodservice: 32.5 cents
  • Food processing: 17 cents
  • Retailing: 12.9 cents
  • Wholesaling: 10.7 cents
  • Farm production and agribusiness: 8.7 cents
  • Energy: 3.8 cents
  • Finance and insurance: 3.3 cents
  • Packaging: 3.3 cents
  • Transportation: 3.3 cents
  • Advertising: 2.7 cents
  • Legal and accounting: 1.3 cents

The remaining 0.5 cent would be for other food production costs.

In these breakdowns, the cost of labor varies according to the industry segment.

“Labor’s share of primary production costs varies by industry,” ERS said. “For the foodservice industry, salaries and benefits to labor account for 62 percent of primary production costs, for farm production and agribusiness, labor accounts for 21 percent of these costs. These figures indicate that the foodservice industry is a labor-intensive industry, whereas farm production is a capital-intensive industry.”

More food production statistics can be obtained from the ERS at www.ers.usda.gov.

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