USA Agriculture & FoodStructure of Agriculture

About 1% of the USA population are farmers (2004); 1920: 30%; in 1787: 90%17% of the total labor force work in food-related industries23 million food-related jobs with 90% of the jobs off farms17% of the country's GNP

One farmer/rancher provides for 114 people: 92 in the USA and 22 abroad.With off-farm agricultural-related jobs, each farmer feeds only 16!

About 90% of farms (total 2 million) are family-owned.

USA Agriculture & Food2% of farms with $500,000 or more sales operate 13% of the land6% of all landowners control over 50% of farmland[in Venezuela: fewer than 5% of all landowners control over 75% of farmland]

2% of farms with $500,000 or more sales generate 50% of gross farm sales9% of farms produce 73% of farm sales

USA Agriculture & Food10% of the largest & richest farms receive 75% of federal farm program payments

USA Agriculture & FoodFederal government farm subsidies per capita by county

20% of the largest farms received 80% of federal farm program payments.

USA Agriculture & FoodVertical Integration in Agriculture: production -> consumption

An Example: ConAgra -- vertical integration and contract farmingIn the 2004 Presidential election, 82% of ConAgra’s political contributions ($197,252) went to the Republican Party [Source: The Hightower Lowdown, January 2005]

• top four firms processing of beef, pork, broilers, sheep, turkeys, and seafood.• second largest food firm in the USA; fourth largest in the world with operations in 32 countries.

D) Retail Brands: Country Pride (fryers), Banquet, Beatrice Food (TV dinners and pot pies)C) Transportation: owns 1,00 barges, 2,000 railroad cars, 100 grain elevatorsB) Feed and Farm Chemical Supplies:

1) largest fertilizer producer and agricultural chemicals2) produces its own poultry and livestock feed

A) Production: 1) owns and operates chicken hatcheries

2) contracts with “independent” farmers to raise chickens3) processes chickens in its own slaughterhouses

USA Agriculture & Food4 largest livestock commodity processors’ share of the US market

10 companies supply more than 50% of all food and drink sold in the USA.

USA Agriculture & Food4 largest plant commodity processors’ share of the US market

USA Agriculture & FoodManipulating Beef Prices: Step 1

USA Agriculture & FoodManipulating Beef Prices: Step 2

USA Agriculture & FoodManipulating Beef Prices: Step 3

USA Agriculture & FoodCreating Foods and Advertising

Creating foods – two examples1) Pringles (first introduced in 1973) by Proctor & Gamble Problem: what is wrong with potato chips? 150 marketing research surveys: Consumers did not like broken, irregular, stale, and burnt potato chipsSolution: •use small and irregular potatoes – lower costs; lower value to farmers•combine with 6 chemicals (color, shelf life, etc.) and sugar•mush poured into potato chip-shaped molds•package in tennis-ball like cans (20% of the total product’s cost)•spent $5.4 million in advertisements; captured 75%+ of the market

2) Fresh Horizons•advertised as 400% more fiber than standard breads•third largest ingredient is pulverized wood pulp•Canada banned it; FDA is testing if wood pulp is dangerous to health

USA Agriculture & FoodConsequences: farmers received 10¢ in 2004 for each food dollar spent; 35¢ in 1984; 40¢ in 1949 Annual return on investments: for farmers 4-5 percent vs. for food-processors about 20 percent

Item Retail Price Farmer's Share

Box of cereal $3.71 4.6 cents

Loaf of bread $1.39 5 cents

Sirloin steak (1 lb.) $4.39 68 cents

Cheddar cheese (1 lb.) $5.91 $1.05

Potato chips (9 oz.) $1.99 3.3 cents

Head of lettuce $1.29 9 cents

Bacon (1 lb.) $3.29 40 cents

Source: Figures based on Washington-area food prices and the U.S. Department of Agriculture (March 20, 2000) and Small Farm Center.

Yet when asked to compare financial rewards received by different levels of America's food production system,

43 percent of the respondents thought food processors received the most,

32 percent thought farmers receive the most, and

24 percent thought supermarkets received the most financial reward.

Source: American Farm Bureau Federation

USA Agriculture & Food

best value

worst value

USA Agriculture & FoodFederal government subsidies to food corporations

McDonald got $1.6 million to help advertise their fast food products overseasSunkist got $78 million since 1986 to promote orange juice in AsiaAll USA agribusiness and food corporation received $6.2 billion per year

Food and Fun and Health•1997 giveaway Teenie Beanie Babies increased sale for McDonalds’ Happy Meals from 10 million a week to 10 million a day!

•96% of USA school children can identify Ronald McDonald; only Santa Claus scores higher!

•average four oz. hamburger patty consists of beef or fat tissue from between 55 to 1,082 cattle [Source: Colorado State University study, cited in The Economist, 9 March 2002]

USA Agriculture & FoodOther Amazing Facts about Foods25% of all food in the USA is wasted at home, restaurants, and stores

In 2000, U.S. food traveled 1,500 to 2,500 miles from farms to consumption (20% more than in 1980)

Socially Irrational but privately profitable international food trade

•USA exports $20 million of lettuce to Mexico and imports $20 million of lettuce from Mexico.

• New York exported $431,000 of California almonds to Italy and imported $397,000 of Italian almonds to the USA.

• California sells $18 million of asparagus abroad while importing $39 million of asparagus from other countries.

Source: Food First, Backgrounder, 2004 and Coop America Newsletter, 2006.

USA Agriculture & Foodfat

hungry

The USA is the largest food producer, yet 35 million go hungry and nearly 66 percent are overweight!

Wealthier neighborhoods have 2-3 times as many supermarkets as low-income areas.

White areas have 4 times more food stores than Black neighborhoods.

Source: Food First, Backgrounder, Vol. 10, No.1, Winter 2004.