The farm share of the food dollar increased one cent in 2020, according to new data from USDA’s Economic Research Service. On average, U.S. farmers received 16.0 cents for farm commodity sales from each consumer dollar spent on domestically produced food in 2020, up from a revised 15 cents in 2019.
Known as the farm share, the one-cent rise is the largest increase in nearly a decade. On the other hand, the marketing share goes to food-supply-chain industries that move domestically produced food from farms to points of purchase, including costs related to packaging, transporting, processing, and selling to consumers at grocery stores and eating-out places.
In the first year of the Coronavirus pandemic, households redirected a substantial amount of their eating-out dollars, or food-away-from-home spending, toward food-at-home markets such as grocery stores. Generally, farmers receive a smaller share from eating-out dollars because a larger portion is spent on preparing and serving meals at restaurants, cafeterias, and other food-service establishments.
Historically, the farm share for food-at-home has averaged 24.3 cents, whereas the farm share for food-away-from-home has averaged below six cents. Although farmers received a smaller share of retail dollars from food-at-home markets in 2020, they received a greater share of the overall food dollar because consumers made more purchases in food-at-home markets, where farmers receive a higher retail share than from food-away-from-home markets.
This gives the unusual result of total farm share rising more than both food-at-home and food-away-from-home farm shares. The USDA, Economic Research Service (ERS) uses input-output analysis to calculate the farm and marketing shares from a typical food dollar, including food purchased at grocery stores and at eating-out establishments.