As promised, from the 1998 USDA Agriculture Fact Book. Here is the
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1. U.S. Agriculture--Linking Consumers and Producers
Cost of Food Services and Distribution
The estimated bill for marketing domestically grown and consumed foods
was $441 billion in 1997. This amount covered all charges for
transporting, processing, and distributing foods that originated on
U.S. farms. It represented 79 percent of the $561 billion consumers
spent for these foods. The remaining 21 percent, or $120 billion,
represents the gross return paid to farmers.
The cost of marketing food has increased considerably over the years,
mainly because of rising costs of labor, transportation, food
packaging materials, and other inputs used in marketing, and also
because of the growing volume of food and the increase in services
provided with the food. In 1987, the cost of marketing farm foods
amounted to $285 billion. In the decade since, the cost of marketing
rose about 55 percent. From 1996 to 1997, the marketing bill rose 4
These rising costs have been the principal factor affecting the rise
in consumer food expenditures. From 1987 to 1997, consumer
expenditures for domestically grown food rose $186 billion. Nearly 85
percent of this increase resulted from an increase in the marketing
The cost of labor is the biggest part of the total food marketing
bill, accounting for nearly half of all marketing costs. Labor used by
assemblers, manufacturers, wholesalers, retailers, and eating places
cost $216 billion in 1997. This was 5.7 percent higher than in 1996
and 66 percent more than in 1987. The total number of food marketing
workers in 1997 was about 13.7 million, about 19 percent more than a
decade earlier. Nearly 70 percent of the growth in food industry
employment occurred in public eating places.
A wide variety of costs comprise the balance of the marketing bill.
These costs include packaging, transportation, energy, advertising,
business taxes, net interest, depreciation, rent, and repairs. Their
relative proportions are illustrated in the accompanying dollar chart.
1998 Agriculture Fact Book, USDA.
Michele Gale-Sinex, communications manager
Center for Integrated Ag Systems
UW-Madison College of Ag and Life Sciences
Voice: (608) 262-8018 FAX: (608) 265-3020
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