WASHINGTON—While shoppers face higher costs at supermarkets and dining establishments, agricultural producers are earning a diminishing portion of each dollar spent on food, new research from the American Farm Bureau Federation reveals.
The organization’s Market Intel study discovered that farmers and ranchers collected only 5.8 cents from every food dollar spent by consumers in 2024, dropping from 5.9 cents in the prior year. This calculation represents the producer’s portion after deducting operational costs.
Plant producers experienced a decrease from 2.9 to 2.5 cents, whereas animal agriculture operators witnessed a modest rise from 3 to 3.3 cents. The uptick for livestock operations stems from reduced herd sizes, which drives up cattle values. In contrast, plant farmers continue battling record-low commodity values while facing escalating costs for necessities such as fuel and fertilizer.
These results underscore the mounting economic challenges confronting numerous agricultural operations, despite persistent high food costs for shoppers.
“America’s farmers and ranchers are the backbone of our country’s food system, yet they only see a small share of the total food dollar,” said AFBF President Zippy Duvall. “While prices may be up at the grocery store, most farmers’ paychecks are shrinking. Even modest swings in commodity prices or increases in expenses can quickly strain farmers’ finances to the breaking point. This imbalance must be corrected to create a brighter future for U.S. agriculture. The only alternative is reliance on other countries to feed America’s families.”
The organization’s analysis draws from USDA Economic Research Service Food Dollar Series information, which monitors how consumer spending flows through the entire supply network. Although producers create raw materials, most food expenditures support activities beyond agricultural operations, including processing, shipping, packaging, wholesale distribution, retail sales, and restaurant services.
“The shrinking farmers’ share of the food dollar is a sobering reminder of how farmers must continually improve production efficiency or look at alternatives to remain financially viable,” said Tony Banks, senior assistant director of the Virginia Farm Bureau Federation Agriculture, Development & Innovation Department.
Banks detailed how Virginia agricultural operations dealing with tighter profit margins are investigating methods to secure larger portions of food spending. Many have started promoting value-enhanced products such as prepared meals and direct-to-consumer sales to generate supplementary revenue.
“While these alternatives can be helpful, they’re not without added costs and not every farmer is going to have the capacity or access to these options,” Banks noted.
The federal Food Dollar information also demonstrated that producers’ portions of consumer food expenditures differ based on product types. Items requiring minimal processing such as fresh eggs, beef, fresh milk, pork, poultry and fish provide larger returns to agricultural operations, while heavily processed items like baked goods and snack products yield significantly less.
Media: Contact Banks at 804-290-1114.
