Farm-to-Food Price Dynamics

ERS compares the prices paid by consumers for food with the prices received by farmers for their corresponding commodities. This product provides data for.
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Infrastructure developments also have underpinned the uniform product offerings and quality controls that have facilitated the growth of fast-food chains. Falling costs also have resulted in offsetting developments. For example, private labels seek to offer a comparable product to national brands at a lower price point. Their market share now approaches 25 percent IRI, With food costs overall declining toward 10 percent of the average American's disposable income, more meals eaten away from home also have become accessible to more people ERS, a.

One of the most important market developments has been the emergence of futures markets 7 traded on centralized exchanges. Moreover, clearinghouses at these centralized exchanges have eliminated the risk of default, making futures markets an attractive way to hedge or unload unwanted price risks. Food prices are a function of the interaction of supply and demand, which are, in turn, functions of major drivers involving bioavailability land and climate , income of both producers and consumers, the productivity efficiency of crop and livestock production, and the growth in population.

On the supply side, crop production and productivity respond to technology e. The more efficient the production is more output per acre of land , the lower the price of the commodity. The caveat on this price is that the productive units e. If the prices that these suppliers can receive in the market are less than their costs, they will go out of business. Public policy that encourages more crop production can act to decrease the costs and therefore the price corn and soybeans or decrease competition and increase the price sugar.

Price Spreads from Farm to Consumer

Increased demand for the crops and livestock will increase the price when demand exceeds the supply. On the demand side, consumer income, population growth, and changing tastes and preferences influence food demand. The willingness to pay for more or better quality food rises as income rises. The feedback loop from consumer markets is critical to informing food producers all along the supply chain about the quantity and quality of food that will sell on the market.

Heterogeneous consumer tastes and lifestyles heavily influence the types of food that are demanded in the market. As incomes rise in low- to middle-income populations globally, consumers demand more animal protein and the raising of more livestock demands greater crop production and generally higher prices.

The demand for animal feed is a driver for increased crop production, yet as crop production becomes more efficient, the price per bushel can actually drop. In addition, the demand for crops used to produce fuel or other nonfood products incents greater supply at higher prices, which also increases the price of the commodity used for food. An important point to understand is that the consumer of raw agricultural commodities is generally not the final consumer, but the supply chain customer e. These agents provide the feedback from final consumers about final demand and willingness-to-pay at the retail point of sale.

Retail competition plays an important role in holding down final prices to consumers, reducing profit margins all along the supply chain. As clearly demonstrated in Figure , the price of food is shaped by many economic sectors beyond agricultural production. Changes in food processing, marketing, transportation, packaging, and retail sectors now have more impact on consumer food prices than do changes in production practices or variation in farm yields and output. As the complexity of the food supply chain increases, the price of food consumed by the public will reflect the gains from greater production efficiencies and the costs associated with increased processing and handling.

When food choices are abundant, consumers are likely to substitute among alternatives as the relative prices change. This price and cross-price elasticity of demand 8 influences the intersection of supply and demand and the final food price. In addition, a cycle of over- and undersupply of basic crops and livestock occurs as farmers respond to higher and lower prices in the market. Typically, they overshoot their estimates of next year's prices, creating an oversupply in the years after prices have been high, which suppresses prices in the current year.

This continual adjustment occurs and responds to both global and domestic demands. Price competition among food retailers is one reason why short-term price fluctuations in commodity prices are not fully reflected in the retail store, although over the long run, inflationary pressures will affect consumer food prices. Food price inflation has traditionally been followed with overall inflation.

Figure illustrates the relative stability of food price increases since Percentage change in the annual CPI for food and prices for field crops, CPI is a measure of the average change over time in the prices paid by consumers for a market basket of consumer goods and services.

Field crop prices are represented more During the s, with many women entering the workforce for the first time, the food industry used this opportunity to market to women who had less time to cook for their families. Advances in domestic technologies e. As a result of this and other social trends and changes in consumer attitudes and behavior, over the past 60 years a growing percentage of food in the United States is consumed away from home ERS, a. Altogether, these changes have likely led to increasingly individualized consumption patterns and larger amounts of added sugars, sodium, and fats in diets.

Many changes in food distribution and consumption have been due to the automobile Jakle and Sculle, ; Schlosser, The car quickly transformed the architecture of cities and towns across the country—and gradually located supermarkets in the suburbs and away from urban areas. Additional transformations induced by the car were quick-service restaurants and stores with drive-through windows to speed up sales. Although the restaurant industry as a whole steadily grew, fast-food businesses in particular exploded during the late 20th century Jakle and Sculle, ; Schlosser, More recently, a study found that the percentage of calories consumed from fast food in adults was lower in 10 percent of calories as compared to 13 percent of calories Fryer and Ervin, Although some 20th-century trends have contributed to a smaller number of foods in American diets, recent decades have seen a resurgence in diversification.

The types of food products and markets available are driven by consumer demands, as they become stimulated by sellers. Alongside commodity, convenience, and staple products, conventional food companies have provided new offerings built around market segmentation and product differentiation. Perhaps the most significant change in consumption patterns in the 21st century has been remarkable growth in demand for food produced or marketed in ways that are perceived to support the health, environmental, or social equity goals of farmers and consumers, such as organic, free range, fair trade, local, and natural.

Animal welfare concerns have encouraged the development of free-range, cage-free, and grass-fed products. New interests, such as gluten free, high fiber, and omega-3, have burst onto the market as a result of consumers' desires for a healthful diet. For example, demand for organic foods in the United States has grown at roughly 20 percent annually ERS, e. Despite potential benefits and safety protections, some customers—especially in Europe—have expressed preferences for food products grown without the use of genetically modified organisms GMOs.

Concurrently, new alternative food marketing and distribution systems have emerged and grown to deliver such products, including farmers' markets, community cooperatives, alternative restaurants, or specialized supermarkets. Some consumers seem to be paying more attention to perceived risks and giving more weight in buying decisions to suspect sources, processes, or future dangers. As per-capita incomes rise, the threshold of acceptable risk has appeared to escalate, moving from risk reduction toward avoidance. At the same time, techniques for detecting chemical residues or foreign substances have become more sensitive from parts per million to parts per billion or trillion.

Although this led to the Food Quality Protection Act 9 and effectively repealed the Delaney Clause for pesticides, it also has heightened consumer awareness of and sensitivity to foodborne risks. As described below, government safety policies and risk management strategies by industry e. As indicated earlier, the U. As recently as the mids, U. At the same time, global trade of grains, rice, oilseeds, meat, and other commodities has grown dramatically, causing interregional interdependencies.

Global food trade also is beginning to reflect more specialization along lines of relative resource endowments and comparative advantage. Regions with abundant land resources e. Labor-intensive agricultural production, such as fruits, vegetables, aquaculture, and horticulture, are being produced in larger amounts for domestic use and for export to labor-scarce regions, such as the United States. Changes in food supply and demand in other countries promise to be a major driver of commodity prices and marketing opportunities for U.

How Brexit Could Make Food Prices Skyrocket

For example, a serious problem in many countries is continuing food insecurity, which can take the form of chronic hunger, periodic food crises, or malnutrition among vulnerable population groups. During much of the 20th century, the drive for greater efficiency in agricultural production yielded a steady decline in inflation-adjusted food prices.

These falling real food prices, in turn, were a major factor in reducing chronic global hunger. By contrast, rising real commodity prices in the first decade of the 21st century has reversed this decline, and it will add as many as million people to the list of the chronically hungry by if the trend continues Runge and Senauer, Moreover, tight supplies produced serious, temporary food crises in and , which were aggravated by market-disrupting price-control and export-control policies.

The problem of food insecurity for some has been compounded by economic development and increases in per-capita incomes, which have generated an increased preference for animal protein in the diet. Although these dietary shifts reflect strong preferences as disposable income rises, they also add to the challenge of feeding 9 billion people by In addition, urbanization is proceeding at the fastest rate in human history; Africa and Asia are likely to be two-thirds urban within two decades.

In addition, virtually all of the projected global population growth between now and will occur in low-income countries, many of them already crowded. This combination of forces will reshape the food security challenge in critical ways. The unfolding of market forces in U. The development of local, state, and federal policies to address farm production, food safety, and other public goals has played a pivotal role in the evolution of the current U. Modern farm policy has its roots in the federal response to the Great Depression through the Agricultural Adjustment Act of and its successors.

A collapse in both domestic food demand and exports had led to price-depressing surpluses. The main commodities covered were grains, oilseeds, cotton, rice, and dairy, although marketing orders came to be available for some fruits and vegetables. This quickly resulted in accumulation of surpluses for those commodities. The farm policy response involved paying farmers and warehousers to store surpluses, paying farmers to reduce their production by idling land or culling herds and paying for surplus disposal through domestic food programs e. As costs of this strategy mounted, the Kennedy administration conducted a farm referendum in to see whether farmers would accept mandatory production controls Cochrane and Runge, When that referendum failed, farm policy began a process of separating income supports from commodity prices in the marketplace.

In the s, political support for farm programs was sustained by broadening the scope of an omnibus legislation to include support for farmers as well as food and nutrition programs designed to address problems and priorities of urban legislators. The ensuing decades witnessed a sequence of policy shifts that shaped the development of the nation's farm and food industries. During the s, rapid growth in global market opportunities and rising commodity prices led to policy reforms to remove caps on acreage that could be planted with particular crops.

When production exceeded demand, market prices for farm commodities were allowed to fall, which benefited food processors and consumers. Meanwhile, federal payments were mainly used to compensate producers for the gap between the market and a designated target price for their products. In the s, efforts to renew farm programs faltered, and environmental advocates succeeded in tying support for farmers to the expansion of programs to incentivize conservation of soil and natural resources. This experiment was short lived, as severe market downturns led to the restoration of price supports, emergency payments, and other income protection programs for farmers on top of the continued direct payment programs.

Farm policy changed course with passage of the Agricultural Act of 13 Farm Act , which was signed on February 7, , and will remain the law until It makes major changes in commodity programs, adds new insurance options, consolidates conservation programs, and expands programs for specialty crops, organic farmers, bioenergy, rural development, and beginning farmers and ranchers.

Price and income support for farmers is now provided primarily through an elaborate suite of subsidized insurance programs. The Act also eliminates the controversial direct payments to farmers and most countercyclical price programs. Although the law reauthorizes SNAP, it tightens the criteria for participation. The Act passed after a 2-year delay, in part as a compromise between rural and urban interests and in part because a reversion to so-called permanent farm law was feared to be highly disruptive. Environmental policies are an increasingly important driver of the evolution of the U.

Traditional farm policies have tended to subsidize farm production while reducing the risks of farming on marginal lands and drought- or flood-prone areas. These approaches have tended to aggravate the environmental stresses that agriculture imposes on land and water resources, and the costs of these externalities are not usually captured in the price consumers pay for their food Buttel, b.

USDA's approach has focused on voluntary programs and public investments that provide technical and financial assistance to encourage farmers to adopt practices that minimize soil erosion and other environmental impacts. Current programs also provide cost-share incentives for adopting or maintaining environmentally sound practices under the Environmental Quality Incentives and the Conservation Stewardship Programs. The funding of these initiatives often has lagged behind the intent of the authorizing measures Cochrane and Runge, Still, some success can be appreciated in the expansion of land under restoration initiatives, the investments in joint ventures where USDA helps with technical assistance and capacity building in sustainable practices, and investments in research.

The Farm Act reduced funding for the Conservation Reserve Program, consolidated conservation programs, and linked crop insurance premium subsidies to conservation compliance. Debates among agricultural producers, environmental groups, and rural communities in regard to the strictness of the policies to manage animal waste by concentrated animal feeding operations CAFOs 14 continue. As with other environmental policies, national guidelines are set up by EPA whereas the states are charged to address specific issues and are responsible for preventing and reducing environmental pollution.

This decentralized approach allows flexibility to respond to unique local industry and resource conditions, but also allows standards to vary from state to state. Recently, EPA has been asked by environmental groups to consider regulating CAFOs under the Clean Air Act, 16 but it is unclear whether their emissions exceed established statutory thresholds.

In the absence of federal rules, some local governments notably in California, the leading agricultural producer in the country have adopted their own regulations to ensure that agricultural operations do not affect air quality. Agriculture and food operations are subject to regulations to prevent the release of potentially hazardous chemicals into the environment.

The initial Federal Insecticide, Fungicide, and Rodenticide Act 17 sought to ensure that such chemicals performed as advertised. First passed in , changes in the s shifted the focus to protecting humans, including farm workers, and wildlife from harm. The Food Quality Protection Act of 18 heightened safety standards, especially for infants and children, and required a complete reassessment of tolerances. The Food Allergen Labeling and Consumer Protection Act 19 was enacted to ensure accurate labeling of food products relative to allergens present, as this is the only way that consumers can avoid consuming potentially life-threatening food allergens.

Food safety policy also has focused on managing the risks from pathogen contamination. Microbial contamination can originate on farms or food handlers and can be introduced as food is stored, transported, or processed. Regulations to prevent and control pathogen contamination began with the Pure Food and Drug Act of 20 and were supplemented by a number of laws dealing with milk , shellfish , and restaurants , culminating in the Food, Drug, and Cosmetic Act.

The HACCP's prevention-focused approach for pathogens and chemical and physical hazards has expanded voluntarily throughout many segments of the food industry.

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Other important provisions of FSMA currently under consideration by FDA are first-time mandatory preventive controls at the farm level and stricter controls of imported foods. FSMA also placed more responsibility on food companies to record and report food safety issues. FDA and USDA food safety regulations apply only to products in interstate commerce, while food service and retail food safety considerations are managed by state and local jurisdictions.

FDA's Food Code, updated every 2 years, provides a model for adoption by these jurisdictions. This consensus-based process, managed by the Conference for Food Protection, involves government, academic, industry, and consumer delegates and leads to science-based requirements to minimize biological, chemical, and physical hazards in foods. In addition to health and safety policies, two types of nutrition policies have been key drivers of the food system. The first is the Recommended Dietary Allowances RDAs for key nutrients, which were established in because of concerns about nutrition deficiencies among many recruits during World War II.

The Dietary Reference Intakes DRIs , first published in , represented a new methodological approach to the development of nutrient reference standards. The most recent edition of the DRIs was released in Developed by expert committees, they are used to plan and assess diets for healthy people, including the standards for government nutrition assistance programs e. The DGA provides guidance about reducing consumption of foods that are believed to increase the risk of chronic disease and increase consumption of foods that promote health. In addition to advice for the general population, the DGA represents a statement of federal nutrition policy and forms the basis of all federal nutrition programs.

The importance of nutrition assistance programs in relieving food insecurity cannot be overemphasized. For example, in SNAP helped more than 47 million participants with their food purchases each month. In , it reached approximately 75 percent of eligible individuals in a month Rosenbaum, Other programs, such as WIC and the School Breakfast and Lunch programs, have a similarly large impact on the ability of individuals and families to access a nutritious diet.

The National School Lunch Program serves more than 30 million children per day. The School Breakfast Program has Many private feeding initiatives, including Feeding America and its local food banks, local food shelves, and institutional feeding programs for the homeless, play a critical role in reducing food insecurity. Early in the 21st century, major changes to energy policy began to affect the food system.

Prompted by concerns about dependence on oil imports and risks from climate change, the Energy Policy Act of 26 and the subsequent Energy Independence and Security Act of 27 mandated the blending of renewable fuels especially ethanol into the national automobile fuel supply. Associated farm policy added subsidies and tariffs to favor domestic U. As a result, grain ethanol production quickly came to consume 40 percent of the U. Two final broader policy arenas that continue to shape the evolution of the modern U. Agricultural protection has persisted through a number of trade-negotiating rounds, both in the United States and in key customer countries.

This is because much governmental support for agriculture is through high and protected domestic prices rather than through direct subsidies, and it has resulted in lower exports of commodities in which the United States has a comparative advantage especially grains, oilseeds, and livestock products and lower imports of commodities in which other countries—particularly developing countries—have a comparative advantage e.

On the other hand, agriculture also is a potentially important carbon sink, so its overall carbon footprint has become more important in policy debates and production and marketing practices Clay, Still, comprehensive national legislation to curtail GHG emissions is just starting to be developed. Progress has been made on adaptation, however, where the federal government has made some efforts to support local communities. In addition, in September Obama announced the launch of the Global Alliance for Climate Smart Agriculture to promote solutions in agriculture that can help decrease the impact of climate change.

Future climate policy initiatives will undoubtedly be a driver of how the food system will develop. Technology has exerted an enormous influence on the food system, both in lifting resource constraints and in ushering in new issues and concerns. At the production end, hybrid seeds, synthetic fertilizers, chemical pesticides, mechanical innovations, information technologies, genetics, bioengineering, and precision agriculture have transformed the face of conventional farming. Together, they have continued to lift the productivity of land and labor; reduced losses to pests, diseases, and waste; increased resilience of plants and animals to weather variations; and produced an abundant quantity and variety of food choices.

At the same time, they have given rise to new concerns about chemical residues in foods; pollution of air, land, and, especially, water; and worker exposure to new hazards. Some of the most significant technological changes that have transformed production agriculture over the past years include. At the processing and distribution levels, technology has enabled better control of pathogens and spoilage organisms, a larger range of product offerings, the substitution of capital and machinery for labor especially in repetitive tasks , and the minimization of loss or waste. Because new technologies can convey a competitive advantage to early developers or adopters, however, they also have further facilitated industry consolidation and growth in market reach of firms to national and international levels while resulting in dislocations of workers and communities see Chapter 5.

Consumption of food also has been reshaped by technologies. Packaging improvements have prolonged the useful life of many foods. Appliances—especially the microwave—have changed food preparation and use. Our mobile society has created huge markets for ready-to-eat and handheld items. Declining real food costs, demands for fresh not frozen or canned foods, and ease of disposal have increased waste at points of consumption.

Bar codes have facilitated inventory management as well as an awareness of consumer behavior, giving added impetus to some market segmentation and product differentiation. Concentration, vertical integration, 28 and inventory management have not only lowered food costs and expanded choices but also contributed to an environment in which obesity and other unhealthy behaviors have increased. Modern genetic engineering techniques also have been a powerful force for change. Genetically engineered corn and soybeans have led to the most rapid transformation of global cropping patterns in history.

In the United States, 90 percent of all cotton, corn, and soybean acres have genetically engineered traits Fernandez-Cornejo et al. From a global perspective, the Food and Agriculture Organization acknowledges that biotechnology can be a useful tool to address the issue of food security when applied appropriately FAO, Potential benefits of GMO food applications include improved nutritional value e.

Although 60 percent of the area planted to bioengineered seeds is in the United States and Canada, adoption in developing countries is expanding rapidly, and 90 percent of the 14 million farmers planting transgenic crops live in developing countries James, This rapid adoption is driven by higher yields and lower pesticide costs that more than offset higher seed costs, with these benefits captured by small and large farmers alike Raney and Pingali, Since their first commercial introduction in , the costs and benefits of genetically engineered plants and animals have generated controversy among consumers, farmers, advocates, and scientists.

Potential risks that need to be managed include inadequate control e. Some stakeholders are concerned about the emergence of super-weeds, reliance of farmers on agrichemical inputs, reduced biodiversity, or other environmental and trade issues Benbrook, ; Garcia and Altieri, ; Gurian-Sherman, ; Liberty Beacon Staff, As a result, the technology has been taken up very unevenly. For example, in the United States, no wheat or rice is genetically modified. Globally, Western Europe has imposed strict labeling and tracking requirements that have essentially banned products of the technology there, while Canada, China, Brazil, and Argentina grow genetically modified crops, especially for animal feed.

Differing standards and timing of approvals for genetically engineered products has disrupted trade patterns and led to disputes. Overall, genetic engineering continues to struggle for acceptance among some consumers and for additional applications, such as in animal and aquaculture production.

Past National Academy of Sciences NAS reports have examined these questions, but with the limited data available at that time, the reports were only able to provide informed advice about the potential unintended consequences on health and environment NRC, , ; NRC and IOM, Currently, another NAS study is being conducted to examine the data and critically evaluate the issues.

The demand for food products is driven by consumer preferences as they are shaped by marketing and advertising, but important social organizations also contribute to product demand and changes in policies. These include public and private educational institutions where many U. Leger, , as well as the extensive food advertising and marketing efforts by the food industry Brownell and Horgen, Changes in the structure of the family and related shifts in the role of women in the workforce also have been important drivers of food system changes.

Social movements—historically built around issues of food safety, but more recently related to how food is produced in the United States—have always been important drivers of change in policy and dietary practices. Finally, changes over time in the structure and organization of the U. Whether food marketing is based on the way foods are presented at a grocery store, labeling on the food itself, or various forms of advertising, the food industry like other industries is aggressive in its marketing strategies.

Some of these practices have been sharply criticized. Chandon and Wansink also proposed that food marketing has contributed to obesity by increasing the accessibility to large portions of inexpensive, tasty, and calorie-dense food. Although the growth of television advertising is often thought of as the best example of using marketing tools—for good or ill—to shape consumer preferences and values, other industry advocacy practices also have shaped the landscape of the food system. Conventional food production companies have pursued growth through market segmentation and new product offerings for ever more selective tastes.

Evidence also suggests that some companies have been able to find economic advantages from offering healthy options Cardello and Wolfson, Social movements are important drivers of food system changes. A wide range of social and political actors have sought to influence public policy and cultural values surrounding food.

The organization of a consumer boycott and unionization of Californian farmworkers by Cesar Chavez in the s dramatically changed the ability of farm employers in the fruit and vegetable industries to rely on poorly paid migrant workers to bring in their crops and stimulated changes in labor law, mechanization, and consumer awareness of the social costs of modern farm and food production Holmes, Many of these advocacy activities have made indelible marks on the food system. Information, private and public organizations, and social movements have contributed to many of the most significant changes in consumer food behaviors, public policy, industrial restructuring, and technological change over the past years.

Advocacy—by industry and its critics—has played and will continue to play a pivotal role in identifying food-related concerns, raising awareness of them, prompting research about them, and promoting debate about them. Some of these concerns ultimately prove to be marginal or misguided, but many of them reshape markets and technologies deployed in the food system or policies that regulate and guide it.

By many measures, the U. Productivity in agriculture is high due to mechanization, fertilizer and agrichemicals, genetic improvements, and improved information management practices. This has resulted in a food system that is able to nourish the majority of the population and provide food exports to much of the rest of the world. In terms of supporting farmers' incomes and wealth, from its inception in the Great Depression, farm policy has reduced volatility in farm income and food prices and raised the incomes and wealth of many farm households and landowners Cochrane, , ; Gardner, ; Pasour and Rucker, The food system contribution to the larger economy occurs off the farm, with more than 80 cents from each consumer dollar spent on food going to a wide range of input, output, and consumption services.

The food system as a whole still provides about 10 percent of total U. Recognizing these benefits and attributes, this report describes some of the health, environmental, social, and economic effects both positive and negative of the U. Some of the most prominent issues relate to effects on human health, environment, climate change, food insecurity, and social and economic inequalities, which incur social and monetary costs.

As demonstrated in this chapter, the effects of the U. With food demand globally projected to increase by 70 percent in the next 40 years, the food system will continue to evolve as it responds to new pressures and creates new issues. Although some of the health, environmental, social, and economic effects of this evolving food system will align with efficiency, others could entail added costs.

This creates complex trade-offs that need to be teased out and understood as policy makers, consumers, and other actors make decisions. The analytical framework, discussed in Chapter 7 , is aimed at providing tools to understand the effects, interactions, and trade-offs within the food system. A more detailed description of the key actors within each subsector is provided in. Loss is the edible, post-harvest food available for human consumption but not consumed for any reason.

Homestead Act of , Public Law , 37th Cong. It was later adopted by other retailers domestically, then internationally. A futures market is a central financial exchange where people can trade standardized futures contracts , that is, a contract to buy specific quantities of a commodity at a specified price with delivery set at a specified time in the future. Elasticity of demand is a measure used in economics to show the responsiveness of the quantity demanded of a good or service to a change in its price. It gives the percentage change in quantity demanded in response to a 1 percent change in price.

Agricultural Act of , Public Law , th Cong. CAFOs are agricultural enterprises where animals are confined on a small land area and feed is brought to the animals. The relevant animal unit for each category varies depending on species and capacity. Vertical integration is a form of business organization in which all stages of production of a good, from the acquisition of raw materials to the retailing of the final product, are controlled by one company.

Turn recording back on. National Center for Biotechnology Information , U. FOOD SYSTEM Food Supply Chain In a simple subsistence agricultural society, the number of actors, inputs, flows, processes, and outputs in a food supply chain might be relatively few because most producers and consumers of food are the same. Supply Chain Material Flows Figure also highlights the flows of food, services, and information about food orange arrows , which begin at the input and farm production sector and extend along the food supply chain until they reach the consumer.

Economic Importance of U. Food Chain Components The percentage of income spent on food is approximately 10 percent ERS, a , although it varies somewhat depending on household income see Chapter 5. Biophysical Environment Initially, it should be obvious that the natural resource base e. Boundaries of the U. Food System As described above, the committee's working definition of the U. Environmental Change The quality and spatial distribution of our natural resources—soils, water, and climate—have contributed to the overall development and regional character of farm production across the United States.

Markets A major driver of the U. Restructuring of Farm and Food Production Competition to be productive and profitable and the development of new technologies and management practices have contributed to significant farm consolidation in the United States. Restructuring of Food Sales Sector The retail—wholesale sector also has evolved dramatically since the s with the advent of self-distribution centers by large retail food companies those with more than stores. Evolution of Other Food System Sectors In contrast to the sales sector, consolidation has not happened as quickly in the food service sector.

Changes in Food Prices Food prices are a function of the interaction of supply and demand, which are, in turn, functions of major drivers involving bioavailability land and climate , income of both producers and consumers, the productivity efficiency of crop and livestock production, and the growth in population. Changes in Consumer Preferences Changes in U. Globalization As indicated earlier, the U. Policies The unfolding of market forces in U.

Farm Policy Modern farm policy has its roots in the federal response to the Great Depression through the Agricultural Adjustment Act of and its successors. Environmental Policies Environmental policies are an increasingly important driver of the evolution of the U. Health and Safety Policies Agriculture and food operations are subject to regulations to prevent the release of potentially hazardous chemicals into the environment.

Energy Policies Early in the 21st century, major changes to energy policy began to affect the food system. Other Policies Two final broader policy arenas that continue to shape the evolution of the modern U. Technology Technology has exerted an enormous influence on the food system, both in lifting resource constraints and in ushering in new issues and concerns.

Some of the most significant technological changes that have transformed production agriculture over the past years include Mechanization, which freed up land from producing feed for draught animals for use to produce food while enabling individuals to farm more land;. Synthetic fertilizers and pesticides, which increased yields per acre and reduced losses to pests and diseases;.


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Plant and animal breeding, which increased land, feed, animal, and human productivity and shortened time to market; and. Information and management practices, which made agronomics and animal husbandry increasingly science based and data driven. Social Organizations The demand for food products is driven by consumer preferences as they are shaped by marketing and advertising, but important social organizations also contribute to product demand and changes in policies.

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Drivers and triggers of international food price spikes and volatility - ScienceDirect

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DEFINING AND MAPPING THE CURRENT U.S. FOOD SYSTEM

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This data set is regularly updated in the Spring and then again in the Fall, as the underlying data become available. ERS data on price spreads for meat, pork, poultry, and eggs can be found in the Meat Price Spreads data product. A different method is used to calculate monthly price spreads for beef, pork, broilers, turkeys, and eggs. Users may also be interested in an interactive data visualization; see Interactive Chart: Price Spreads and Food Markets. Milk and dairy basket.

Cheddar cheese, one pound. Ice cream, regular, one-half gallon. Whole milk, one gallon. Fresh tomatoes, field grown.