According to the U.S. Department of Agriculture, in 2017, consumers in the United States spent $1.2 trillion on U.S.-produced food. Nearly all food starts out on a farm, but you’ll be surprised to see just how little of that food dollar goes to the farmer.
Of the $1.2 trillion in 2017 food spending, the largest cost share of the food dollar went to food services (restaurants) at 36.7%—this pays for others to host, prepare and serve our meals, then clean up afterward. The next largest share, at 15%, went to food processors, such as bakeries, meat and dairy processors, and frozen food manufacturers. Rounding out the top five industry groups are food retailers (12.6%), wholesalers of both food products and production inputs (9.1%) and farm producers (7.8%). The farm producer’s share is what they receive after they pay for production inputs such as seed, fertilizer and electricity.
For the fourth year in a row, 2017 saw no increase in the farm production cost share of the food dollar. But unlike in 2015-2016, when the cost of farm production in the food dollar dropped sharply, average prices received by U.S. farmers actually went up in 2017. Increases in eating-out spending by consumers actually offset the likely increase in the farm production cost share as more money went to food services.