Where Does the Food Dollar Go?

Where Does the Food Dollar Go?

by Nate Furler, Marketing Specialist

A revised and expanded food dollar series was released by the United States Department of Agriculture (USDA) in February 2011.  This report explains how food dollars are split among the food industry, including what portion of the average dollar goes to farm & agribusiness, food processing, packaging, transportation, retail trade, food services, energy and finance.  The report goes into great detail and I would highly advise reading it to get an idea of where your food dollars are winding up.

The main piece of information that I would like to pass on to you, the consumer, is how much money is spent on food processing, packaging, transportation, retail trade, food service and energy.  According to the analysis, these factors contribute 80.2% of the total food dollar.  The analysis also splits the food dollar into two separate categories of “at-home food dollar” and “away-from-home food dollar.”  In this way, you can see the difference between the two sets of inputs necessary to get the product in the consumer’s hands.

What rings true with the analysis is that the fewer hands a product touches and the more work that we do ourselves (as consumers), the greater the savings and the farther your food dollars will stretch.  Shopping the Bulk department, for instance, is more time intensive and involved than simply walking the grocery aisles and picking up the next box of cereal or pasta.  If you bring your own container, you have to clean the container and cart the container back and forth to the store to refill it.  Even if you don’t bring your own container, and we hope you do, you can fill a new container which still removes one level of processing that a regularly boxed item undergoes.

If you wish to read the entire analysis put together by the USDA titled “A Revised and Expanded Food Dollar Series – A Better Understanding of Our Food Costs,” go online to www.ers.usda.gov/publications/ERR114/