Key Accomplishments, FY 2009
USDA Priority Goal 1: Assist
rural communities to create prosperity so they are self-sustaining,
repopulating, and economically thriving
Key outcome:
Enhanced understanding by policymakers, regulators, program
managers, and those shaping public debate of economic issues
affecting rural development, rural well-being, farm and household
income, and rural communities.
The 2008/2009
World Economic Crisis: What It Means for U.S. Agriculture. The
world economic crisis that began in 2008 has major consequences for
U.S. agriculture. ERS discusses the effect of the U.S. and
global economic downturn on the U.S. agricultural sector. The
weakening of global demand because of emerging recessions and
declining economic growth results in reduced export demand and
lower agricultural commodity prices, compared with those in
2008. These, in turn, reduce U.S. farm income and place
downward pressures on farm real estate values. So far, the
overall impact on U.S. agriculture is not as severe as on the
broader U.S. economy because the record-high agricultural exports,
prices, and farm income in 2007 and 2008 put U.S. farmers on solid
financial ground.
Market
Analysis and Outlook. ERS-working closely with the World
Agricultural Outlook Board, the Foreign Agricultural Service and
other USDA agencies-conducts market analysis and provides short-
and long-term projections of U.S. and world agricultural
production, consumption, and trade. The market and outlook
program has enhanced the quality, transparency, and accessibility
of data and analytical information. Building on earlier
efforts, an agreement with Pennsylvania State University and the
International Life Sciences Institute fosters public-private
collaboration to develop a database of up-to-date, raw
material-to-food product conversion factors for a range of crop-
and livestock-based products. Updating of ERS data reporting
continued with the completion of data products for wheat,
aquaculture, and meat and livestock trade.
Federal Tax
Policies and Farm Households. Significant changes
in Federal individual income and estate tax policies have occurred
over the last 10 years. This ERS analysis suggests that
changes in Federal tax provisions affecting both individual and
business income taxes have reduced average tax rates for all farm
households, resulting in the lowest tax burden on farm income and
investment in a decade. Similarly, changes to Federal estate
tax policies have increased the value of property that can be
transferred to the next generation free of the estate tax, and
reduced the number of farm estates subject to the tax.
Issues and
Prospects in Corn, Soybeans, and Wheat Futures Markets: New
Entrants, Price Volatility, and Market Performance
Implications. The past 5 years have seen large increases
in trading of corn, soybean, and wheat futures contracts by
nontraditional traders, a trend that coincided with historic price
increases for these commodities. These events have raised questions
about whether changes in the composition of traders participating
have contributed to movements in commodity prices beyond the
effects of market fundamentals. Evidence suggests the link between
futures and cash prices for some commodity markets may have
weakened (poor convergence), making it more difficult for
traditional traders to use futures markets to manage risk. This
study evaluates the role and objective of new futures traders
compared with those of traditional futures traders and seeks to
determine if the composition of traders in futures markets has
contributed to convergence problems. Market activity is analyzed by
focusing on positions of both traditional and new market traders,
price levels, price volatility, and volume and open-interest
trends. Convergence of futures and cash prices is examined, along
with implications and prospects for risk management by market
participants. The study also discusses the implications for market
performance and the regulatory response of the Commodity Futures
Trading Commission.
Value of
Broadband Internet Access to Rural America. Many
Internet applications require high transmission speeds, which has
raised concerns about those who lack broadband Internet
access. A recent ERS report found that rural communities have
less broadband Internet use than metro communities, with differing
degrees of broadband availability across rural communities.
Rural communities that had greater broadband Internet access had
greater economic growth.
Status of Rural
Health Care. Rural residents have higher rates of
mortality, disability, and chronic disease than their urban
counterparts. An ERS study found several factors that
contribute negatively to the health status of rural residents such
as lower socioeconomic status, smoking, weight, and exercise
levels. Farmers and their families also have higher risks of
workplace hazards.
Ethanol Byproducts Have Value. The byproducts
of making ethanol, sweeteners, syrups, and oils used to be
considered less valuable than the primary products. But the
increased livestock-feed market for such byproducts in the past few
years has prompted the ethanol industry to more highly
value grain-based "co-products" that have market value
separate from the bioenergy products. As discussed by
ERS economists in Ethanol Co-Product Use in U.S. Cattle Feeding:
Lessons Learned and Considerations, co-products such as dried
distillers' grains, corn gluten feed, corn gluten meal, corn oil,
solubles, and brewer's grains have become economically viable
components-along with traditional ingredients (such as corn,
soybean meal, and urea)- in feed rations.
Assessment of the Food, Conservation, and
Energy Act of 2008 (2008 Farm Bill). ERS has a key
role in setting the stage to gauge the economic impacts of the 2008
Farm Bill. Following the 2002 Farm Bill, ERS posted a
"side-by-side" comparing the 1996 and 2002 Farm Bills, which has
been the most used Web product ever produced by ERS. For the
2008 Farm Bill, ERS produced a Web-based side-by-side feature with
improved functionality and more in-depth and descriptive
content. The side-by-side provides the basis for
comprehensive analysis of the economic impacts of the commodity,
conservation, and trade provisions.
Structural Change in Livestock Industries.
ERS research described changes within the U.S. livestock sector
during the past two decades. The Transformation of U.S. Livestock
Agriculture describes structural change in livestock
production, documenting the shift to much larger operations and
increasing vertical coordination. Consequences of structural
change, such as geographically concentrating animal waste, are also
explored, along with issues concerning the use of sub-therapeutic
antibiotics in livestock production. Other research, Changes in Manure Management
in the Hog Sector: 1998-2004, has explored the issue of
livestock manure management with a more in-depth look at how
systems and practices have changed in response to structural and
environmental policy changes.
Commodity Programs and Farm Structure. In a
2009 report, ERS examined the links between commodity payments and
the changing structure of production for program commodities.
Production is shifting to larger farms, and this report assesses
the pace of those shifts. It also identifies a strong
relationship between commodity payments and shifts of production:
those locations with the highest commodity payments per acre also
have the most rapid consolidation of production into larger
enterprises. The statistical relationship is large and
pervasive. The report assesses several alternative
explanations for the relationship.
Credit: Access, Constraints, and Implications for Farms
and Sole Proprietorships. The content of the Agricultural
Resource Management Survey was revised to ask farmers about the
context for their use of debt capital in their farming
operations. Specifically, farmers were asked explicitly about
their use of debt. If debt was not used either in purchasing
capital items or in acquiring operating inputs, a follow-up
question explored why the operation did not take out loans or use a
line of credit. A range of response was allowed:
self-financing due to the sufficiency of available funds,
transaction costs, risk associated with debt, and the inability to
obtain new or additional credit. Additional questions asked
whether a producer's credit application has been turned down or
reduced in amount.
Impact of Baby
Boom Migration on Rural America. Members of the
baby boom cohort are approaching a period in their lives when moves
to rural and small-town destinations increase. An ERS
analysis of age-specific net migration during the 1990s reveals
extensive shifts in migration patterns as Americans move through
different life-cycle stages. The analysis finds a significant
increase in the propensity to migrate to non-metro counties as
people reach their fifties and sixties, and projects a shift in
migration among boomers toward more isolated settings, especially
those with high natural and urban amenities and lower housing
costs.
Beginning
Farmers and Ranchers. Beginning farmers (defined
as those who have operated a farm or ranch for 10years or less) may
face obstacles getting started, including high start-up costs and
limited availability of land. This report draws on data from
annual surveys and the Census of Agriculture to provide
policymakers with a better understanding of beginning farmers and
ranchers, including how they contribute to U.S. agricultural
production and participate in conservation programs.
Million-Dollar Farms in the New
Century. Farms with annual sales of at least $1
million accounted for about half of U.S. farm sales in 2002, up
from a fourth in 1982. By 2006, million-dollar farms,
accounting for 2 percent of all U.S. farms, dominated production of
high-value crops, milk, hogs, poultry, and beef. Most
million-dollar farms (84 percent) are family farms; that is, the
farm operator and relatives of the operator own the
business.
Agritourism Opportunities for Farm
Operators. Farm-based recreation provides an
important niche market for farmers, but limited empirical
information is available on the topic. Access to two USDA
databases, the 2004 ARMS and the 2000 National Survey on Recreation
and the Environment, provided researchers with a deeper
understanding of who operates farm-based recreation enterprises,
such as hunting and fishing operations, horseback riding
businesses, onfarm rodeos, and petting zoos. Regression
analysis identified the importance of various farmer and farm
characteristics, as well as local and regional factors associated
with farmer operation of, and income derived from, farm-based
recreation. In 2004, approximately 52,000 U.S. farms-2.5
percent of all farms-received income from farm-based recreation,
totaling about $955 million.
Farm Definitions Determine Eligibility. USDA
defines "farm" very broadly in order to comprehensively measure
agricultural activity in the U.S. While desirable for
obtaining comprehensive national coverage, measurement and analysis
based on the current definition can provide misleading
characterizations of farms and farm structure in the U.S.
This study, Exploring
Alternative Farm Definitions: Implications for Agricultural
Statistics and Program Eligibility, outlines the structure of
U.S. farms, discusses the current farm definition, evaluates
several potential criteria that have been proposed to define target
farms more precisely, and examines how these criteria affect both
statistical coverage and program eligibility.
Farm Debt and Debt Financing. Income and
wealth for farm businesses have changed noticeably this decade.
Debt levels have been rising, asset levels have outpaced debt
despite a recent fall in land prices, and equity has more than
doubled for farm businesses. However, recent declines in farm
income and falling land prices have raised concerns about the
financial position of U.S. farms. A 2009 ERS report, The Debt Finance Landscape
for U.S. Farming and Farm Business, found that the distribution
of debt among farm operators has been changing. In 1986, nearly 60
percent of farms used debt financing. By 2007, the number had
dropped to 31 percent. In essence, farm debt has become more
concentrated in fewer, larger farm businesses. Lenders and
farm operators indicate that real estate accounts for the largest
use of farm debt.
USDA Priority Goal 2: Ensure our
national forests and private working lands are conserved, restored,
and made more resilient to climate change, while enhancing our
water resources
Key Outcome:
Enhanced understanding by policymakers, regulators, program
managers, and those shaping public debate of economic issues
related to developing Federal farm, natural resource, and rural
policies and programs that respond to the challenges of climate
change and the need to protect and maintain the environment while
improving agricultural competitiveness and economic
growth.
Key Accomplishments:
Markets for Conservation. Farmers produce a
variety of goods and services for which markets generally do not
exist, including improved water quality, carbon sequestration,
wildlife habitat, open space, and water supplies. A recent
ERS report on the use of markets to increase private investment in
environmental stewardship identified the environmental services
different types of farmers could provide, and identified
impediments to market formation. Case studies examined in the
report included water quality trading, carbon markets, wetland
restoration, and recreation on Conservation Reserve Program
lands.
Land Ownership and Carbon Markets. Climate
mitigation proposals often contain provisions to pay for the
sequestration of carbon. Agricultural producer participation
in such programs will depend on policy and economic incentives and
barriers. Agricultural Land Tenure and Carbon Offsets
examined the potential role that land ownership might play in
determining the agricultural sector's involvement in carbon
sequestration programs. This report finds that land ownership
should not be a constraining factor in agriculture's ability to
provide carbon offsets.
"Green Payments" in Agriculture. A recent ERS
report addresses the potential advantages and disadvantages of
linking commodity and conservation programs into a single policy
tool. The research examined the distribution of income
support and environmental gains from various scenarios, combining
the income support objective of existing commodity programs and
environmental objectives of existing USDA conservation
programs. Because commodity and conservation payments tend to
go to different producers on different types of land, scenario
outcomes varied. Conservation-based payments yielded larger
environmental gain and substantial income support, although the
distribution of income support across farms differed markedly from
that of current commodity programs.
Economic Measures of Soil Conservation Benefits:
Regional Values for Policy Assessment describes the data
and methodologies used to apply monetary values to changes in
soil erosion. The benefit values are regional dollar-per-ton
measures of 14 different categories of soil conservation
benefits.
USDA Priority Goal 3: Help
America promote agricultural production and biotechnology exports
as America works to increase food security
Key Outcome:
Enhanced understanding by policymakers, regulators, program
managers, and organizations shaping public debate of economic
issues related to adoption of economically and environmentally
sustainable technologies, factors affecting imports of U.S.
agricultural products (including biotech products), and strategies
to increase markets for U.S. products, including biotech crop
exports.
Key Accomplishments
The U.S. Organic Sector: Emerging Issues and Policy
Dimensions. The Federal organic regulatory program
includes a "USDA organic" label that has bolstered consumer
assurance and helped drive a rapid expansion in sales.
Domestic supply now trails demand for many products. ERS
research describes changes in the character of the U.S. organic
sector in response to this growth, and highlights some emerging
issues and concerns. Recent ERS findings provide supporting
analysis on issues across the organic supply chain, from structural
changes in the organic farm sector to the socioeconomic
characteristics of organic consumers.
Characteristics, Costs, and Issues for Organic
Dairy Farming. Organic milk production has been one of
the fastest growing segments of organic agriculture. Despite the
growing number of organic dairy operations, the characteristics of
organic dairy operations and the relative costs of organic and
conventional milk production have been difficult to analyze. A
recent ERS report examines the structure, costs, and challenges of
organic milk production. The findings suggest that economic
forces have made organic operations more like conventional
operations and that the future structure of the industry may depend
on the interpretation and implementation of new organic pasture
rules.
Marketing U.S. Organic Foods: Recent Trends From
Farms to Consumers: Organic foods now occupy prominent
shelf space in the produce and dairy aisles of most mainstream U.S.
food retailers. The marketing boom has pushed retail sales of
organic foods up to $21.1 billion in 2008 from $3.6 billion in
1997. U.S. organic-industry growth is evident in an expanding
number of retailers selling a wider variety of foods, the
development of private-label product lines by many supermarkets,
and the widespread introduction of new products. A broader range of
consumers has been buying more varieties of organic food. Organic
handlers, who purchase products from farmers and often supply them
to retailers, sell more organic products to conventional retailers
and club stores than ever before. Only one segment has not kept
pace-organic farms have struggled at times to produce sufficient
supply to keep up with the rapid growth in demand, leading to
periodic shortages of organic products.
Invasive
Species Management. Under the Program of Research
on the Economics of Invasive Species Management, research has been
conducted to support the economic basis of decisionmaking
concerning invasive species issues, policies, and programs. A
2009 report details the objectives and activities of the program
and the accomplishments of each funded project.
Trade Negotiations and Policy Analysis. ERS
research on trade policy is focused on providing analysis that
evaluates the impacts of changes in U.S. and other countries'
agricultural trade policies. ERS research in support of WTO
negotiations has helped to inform and strengthen U.S. negotiating
positions on agriculture. ERS has developed quantitative
estimates of the impacts of market access liberalization proposals
in domestic and foreign markets. In a recent article, World Trade Organization and Globalization Help
Facilitate Growth in Agricultural Trade, ERS examined the
benefits and obligations of WTO membership. Despite strong
critics of WTO, membership continues to grow as countries seek the
benefits of expanding trade. In the WTO, member countries
trade concessions to gain access to foreign markets, benefiting
foreign producers and consumers in the aggregate.
U.S., Canada, and Mexico Economic
Integration. Implementation of the agricultural
provisions of the North American Free Trade Agreement (NAFTA) has
drawn to a close. In 2008, the last of NAFTA's transitional
restrictions governing U.S.-Mexico and Canada-Mexico agricultural
trade were removed, concluding a 14-year project in which the
member countries systematically dismantled numerous barriers to
regional agricultural trade. ERS has released a new
publication, NAFTA at
15: Building on Free Trade, as a sequel to our continuing
analysis of the changes and implications of NAFTA on U.S.
agriculture. Agricultural trade within the free-trade area
has grown dramatically, and Canadian and Mexican industries that
rely on U.S. agricultural inputs have expanded. U.S.
feedstuffs have facilitated a marked increase in Mexican meat
production and consumption, and the importance of Canadian and
Mexican produce to U.S. fruit and vegetable consumption continues
to grow.
Funding Public Agricultural Research. The
public agricultural research system in the U.S. is a Federal-State
partnership, with most research conducted at State
institutions. In recent years, State funds have declined,
USDA funds have remained fairly steady, but funding from other
Federal agencies and the private sector has increased. Along
with shifts in funding sources, the proportion of basic research
being undertaken within the public agricultural research system has
declined. The 2009 report, U.S. Public Agricultural Research: Changes in Funding
Sources and Shifts in Emphasis, 1980-2005, focuses on the way
public agricultural research is funded in the U.S. and how shifts
in funding sources reflect changes in the type of research
pursued.
Corn Prices Near Record High, But What About
Food Costs? Higher corn prices-whether triggered
by increased ethanol production or other factors-increase animal
feed and ingredient costs for farmers and food manufacturers.
The impact on retail food prices depends on how long the increased
demand for corn drives up farm corn prices and the extent to which
these higher prices are passed through to retail. This
research traced the effect of higher corn prices on U.S. retail
food prices by analyzing data on price trends and price response of
corn-dependent foods to cost changes. Results suggest a
pass-through to retail prices at a rate less than 10percent of the
corn price change.
USDA Priority Goal 4: Ensure that all
of America's children have access to safe, nutritious, and balanced
meals
Key Outcome:
Enhanced understanding by policymakers, regulators, program
managers, and those shaping public debate of economic issues
related to improving the efficiency, efficacy, and equity of public
policies and programs relating to food prices and availability at
home and abroad, consumer food choices, nutrition and health
outcomes, nutrition assistance programs, and the protection
of consumers from unsafe food.
Key Accomplishments
Access to Affordable and Nutritious Food:
Measuring and Understanding Food Deserts and Their
Consequences. ERS led a congressionally
mandated, 1-year study of food deserts. Food deserts are
areas with limited access to affordable and nutritious food,
particularly lower-income neighborhoods and communities and areas
distant from full-service supermarkets. The study defined and
clarified the term 'food deserts,' developed a strategy to assess
the prevalence of food deserts, identified characteristics and
factors that influence food deserts, considered the possible
effects of food deserts on the health and well-being of the
population, and outlined possible approaches for addressing food
deserts. A workshop with commissioned papers and
presentations by experts in this field and by other stakeholders
(representatives from other government agencies, appropriate
businesses and nonprofit and faith-based organizations, public
interest groups, and other policy groups) was held. A
national study that uses the different measures of food deserts and
quantifies and maps their scope was conducted, including in-depth
case studies of different types of food deserts. The report
was delivered to the Congress in June 2009.
Food Security
Assessment, 2008-2009. Global food security has
been a major concern for many years. According to a recent
ERS report, food security in 70 developing countries is projected
to deteriorate over the next decade. The number of
food-insecure people in the developing countries analyzed is
estimated to rise to 833 million in 2009, almost 2 percent above
2008. Despite a decline in food prices in late 2008,
deteriorating purchasing power and food security are expected in
2009 because of the growing financial deficits and higher inflation
that have occurred in recent years.
Food Safety and Imports: An Analysis of FDA
Import Refusal Reports. An ERS report examined
U.S. Food and Drug Administration data on refusals of food offered
for importation into the United States from 1998 to 2004.
Although the data do not necessarily reflect the distribution of
risk in foods, the study found that import refusals highlight food
safety problems that appear to recur in trade and where the FDA has
focused its import alerts, examinations (e.g., sampling), and other
monitoring efforts. The data show some food industries and
types of violations may be consistent sources of problems both over
time and in comparison with previous studies of more limited
data. The three food industry groups with the most violations
were vegetables (20.6 percent of total violations), fishery and
seafood (20.1 percent), and fruits (11.7 percent). Violations
observed over the entire time period include sanitary issues in
seafood and fruit products, pesticides in vegetables, and
unregistered processes for canned food products in all three
industries.
The Effects of Avian Influenza News on
Consumer Purchasing Behavior: A Case Study of Italian Consumers'
Retail Purchases. To better understand how
information about potential health hazards influences food demand,
a case study examined consumers' responses to newspaper articles on
Avian Influenza, informally referred to as bird flu. The
focus here was on the response to bird flu information in Italy as
news about Highly Pathogenic H5N1 Avian Influenza (HPAI H5N1)
unfolded duringOctober 2004-October 2006, beginning after reports
of the first outbreaks in Southeast Asia, and extending beyond the
point at which outbreaks were reported in Western Europe.
Estimated poultry demand, as influenced by the volume of newspaper
reports on bird flu, reveals the magnitude and duration of
newspaper articles' impacts on consumers' food choices.
Larger numbers of bird flu news reports led to larger reductions in
poultry purchases. Most impacts were of limited duration, and
all began to diminish within 5 weeks.
Do Food Labels Make a Difference? ERS
completed a study of how food labels can guide consumers to
healthier food choices. Consumers, food companies,
third-party entities, and governments play a role in determining
which attributes are described on the label. The interaction
of these groups influences which information is labeled
voluntarily, which is mandated, and which is not labeled at
all. It shapes the way information is presented, and the
accuracy and credibility of that information. The economics
behind food labeling provide insight into the dynamics of voluntary
food labeling and the types of market failures best addressed
through mandatory labeling requirements. Data suggest that
competition drives food manufacturers to voluntarily label their
products' desirable attributes and to use third-party certifiers to
bolster credibility.
The Decline in Consumer Use of Food
Nutrition Labels, 1995-2006. This report used data
from two consumer-knowledge surveys to examine changes in the
pattern of nutrition label use in the United States 10 years after
the Nutrition Labeling and Education Act took effect. The
study revealed that from 1995 to 1996 and from 2005 to 2006,
consumer use of nutrition labels when making food purchases
declined. The decrease in use was greatest for young
adults.
Food Policy: Check the List of
Ingredients. Policies designed to improve the diet
quality and health of Americans may sometimes hit their target
through an indirect means-those who make the foods that people
eat. Food manufacturers may respond to policy by
reformulating their products to better appeal to health-conscious
consumers. If the change in how products are made is
widespread, then improvements in diet quality will extend to many
consumers, even those who do not care about eating healthy.
This research examined these forces to provide insight into how
policies stimulate and perpetuate improvements in Americans'
diets. Findings suggest that (1) food manufacturers often
reformulate in response to policies targeted directly at consumers
such as nutrition information and education programs; (2) policy
influencing the use of common ingredients in processed foods, such
as trans fats, can affect diet quality for many consumers,
including those who do not know or care about the healthfulness of
processed food ingredients; and (3) reformulating products to use
healthier ingredients brings about changes in food production that
may extend all the way to the farm.
Foodborne Illness Cost
Calculator. ERS's estimates of the costs of
illness and premature death for a number of foodborne illnesses
have been used in regulatory cost-benefit and impact
analyses. Like all cost estimates, the ERS estimates include
assumptions about disease incidence, outcome severity, and the
level of medical, productivity, and disutility costs. Changes
to any of these assumptions could change the cost estimates and, as
a result, change the way policymakers rank risks, prioritize
spending, and formulate food safety policies. The Foodborne
Illness Cost Calculator provides information on the assumptions
behind foodborne illness cost estimates, and enables the use to
calculate his or her own cost estimates.
The Interplay of
Regulation and Marketing Incentives in Providing Food
Safety. This report examines the relative
contributions of food safety process regulation and
management-determined actions on Salmonella spp control in the meat
and poultry industries. Results show that
management-determined actions accounted for about two-thirds of the
reduction in the number of samples testing positive for Salmonella
spp in 2000. However, process regulation accounted for more
than half of all food safety process control for about a quarter of
the plants and for the entire food safety process control system of
some plants. These results suggest that both process
regulation and management-determined actions play vital roles in
meat and poultry food safety process control.
Can Low-Income Americans Afford a Healthy
Diet? Low-income households tend to eat less
nutritious diets than other households. On average they do
not meet Federal recommendations for consumption of fruit,
vegetables, whole grains, and low-fat dairy products, and they
consume fewer servings of these nutritious foods than other
households. The difference between low-income households'
food choices and those of other households raises concerns about
the affordability of healthy foods. Do low-income households
have unhealthy diets because they cannot afford more healthy
ones? This report finds low-income households that receive
maximum benefits from the Supplemental Nutrition Assistance Program
usually have the purchasing power necessary to afford healthy
diets; others may not. Relative to other households,
low-income households must allocate a higher share of both their
income and time budgets to food if they wish to consume palatable,
nutritious meals. For many American households, achieving an
affordable healthy diet will require reducing their expenditures on
less nutritious foods and moving nutrient-dense foods, such as
fruit and vegetables, to the center of their plates and
budgets.
Household Food Security in the United States.
Food security for a household means that all household members have
access, at all times, to enough food for an active, healthy
life. To inform policymakers and the public about the extent
to which U.S. households consistently have economic access to
enough food, ERS publishes an annual statistical report on
household food security in the United States. The report and
its underlying data are widely used by government agencies, the
media, and advocacy groups to monitor the extent of food insecurity
in this country, progress toward national objectives, and
performance of USDA's food assistance programs. The latest
report, Household Food Security in the United States,
2008, based on data from the December 2008 Food Security
Survey, provided the most recent statistics, at the time of
publishing, on the food security of U.S. households, as well as on
how much they spent for food and the extent to which food-insecure
households participated in Federal and community food assistance
programs. Results show that 85 percent of American households
were food secure throughout the entire year in 2008. The
remaining 15 percent of households were food insecure at least some
time during that year.
Food Spending Declined and Food Insecurity
Increased for Middle-Income and Low-Income Households.
From 2000 to 2007, median spending on food by U.S. households
declined by 12 percent relative to the (rising) cost of USDA's
Thrifty Food Plan, and by 6 percent relative to the (rising)
Consumer Price Index (CPI) for Food and Beverages. Over the same
period, the national prevalence of very low food security increased
by about one-third, from 3.1 percent of households in 2000 to 4.1
percent in 2007. The deterioration in food security was greatest in
the second-lowest income quintile, in which the prevalence of very
low food security increased by about half. The decline was largest
in the second-lowest income quintile, in which average
CPI-inflation-adjusted spending for food declined by 16 percent.
The declines in food spending by middle- and low-income households
were accompanied by increases in spending for housing and, in the
two lowest income quintiles, by declines in income and total
spending.
Tracking Trends in U.S. Food Consumption. ERS
maintains the U.S. per capita food consumption data system.
This system is an important statistical indicator that tracks food
and nutrient availability from 1909. The data facilitate
policymaking and regulatory decisions about farm assistance
programs, nutrition education, public health programs, and
regulation of vitamin and mineral fortification and food
labeling. The system is regularly updated as new data become
available. ERS researchers publish reports on U.S. food
consumption patterns using the database on a regular
basis.
Consumer Data and Information Program (CDIP).
ERS continued development of a consumer and data infrastructure
needed for analyses of food policy issues. CDIP efforts focus
on improving ERS's Food Availability Data System, obtaining
information on Americans' time use on eating and preparing food
using the Bureau of Labor Statistics American Time Use Survey;
gathering information on consumer knowledge about diets and health,
as well as economic content using the National Health and Nutrition
Examination Survey (NHANES); and understanding the characteristics
of proprietary datasets. ERS initiated an effort to make the
data collected through NHANES more readily available to
researchers, and launched a new effort to design the content of the
2009-10 module for NHANES. To support price analysis and
consumer food choice behavior, ERS continued the acquisition and
use of Nielsen's Homescan data on packaged and random-weight food
purchases.
Food
Availability (Per Capita) Data System. The ERS
food availability (per capita) data system includes three distinct
but related data series on food consumption. The data serve
as popular proxies for actual consumption. Food availability
data are now available through 2007 at the national level.
Also included are data on nutrient availability in the food supply
and data on loss-adjusted food availability. This latter data
series uses dietary recommendations from the 2005 Dietary
Guidelines for Americans and its supporting guidance document
MyPyramid Plan. ERS annually calculates the amounts of
several hundred foods available for human consumption in the United
States. The data are available at the national level only
(State, city, or regional data, for example, are not
available). This data series provides estimates, for example,
of the pounds of beef available for domestic consumption per capita
per year. The data are available on an annual basis.
Most data extend back to 1909.
Fruit and Vegetable Consumption by
Low-Income Americans: Would a Price Reduction Make a
Difference? This study examined low-income
Americans' food consumption to estimate the effect of a 10-percent
price reduction for fruits and vegetables. Results show that
the reduction would encourage low-income households to increase
their consumption of fruits by 2.1-5.2 percent and vegetables by
2.1-4.9 percent. The annual cost of such a subsidy for
low-income Americans would be about $310 million for fruits and
$270 million for vegetables. And most would still not meet
Federal dietary recommendations.
Could Behavioral Economics Help Improve Diet
Quality for Nutrition Assistance Program
Participants? This study used behavioral
economics, food marketing, and psychology to identify possible
options for improving the diets and health of participants in the
Federal food assistance programs. Findings from behavioral
and psychological studies indicate that people regularly and
predictably behave in ways that contradict some standard
assumptions of economic analysis. Recognizing that
consumption choices are determined by factors other than prices,
income, and information illuminates a broad array of strategies to
influence consumers' food choices. These strategies expand
the list of possible ideas for improving the diet quality and
health of participants in USDA's FSP, WIC, and National School
Lunch and School Breakfast Programs.
Balancing Nutrition, Participation, and Cost
in the National School Lunch Program. The National
School Lunch Program provides federally subsidized meals to more
than 30 million children each school day. Recently, reported
high rates of obesity and overweight among children have focused
attention on the nutritional quality of school lunches.
However, this attention has raised another fundamental question:
Can schools meet the program's nutrition goals while covering
costs, especially in times of rising food prices? The
free-meal subsidy covers most of the per-meal cost, but the price
paid by most paying students covers only half of the per-meal
cost. School foodservice managers say that in order to appeal
to students and raise revenues, they need to offer less nutritious
a la carte foods and vending snacks.
WIC and the
Battle Against Childhood Overweight. This research
addressed the important topic of whether participation in the WIC
program is related to overweight and obesity among young
children. Results from the study, which uses data covering 20
years, showed no association between WIC participation and BMI or
the probability of being at risk of overweight. However,
being from a low-income family, especially a low-income
Mexican-American family, raised the probability of a child's being
at risk for overweight.
The Prevalence
and Severity of Food Insecurity in Households with
Children. For this investigation, researchers used
data from the annual food security surveys sponsored by USDA to
describe the extent and severity of food insecurity in households
with children as of 2007, trends since 1999, and the
characteristics of households most affected by food
insecurity. Results showed that in 2007, 15.8 percent of
households with children were food insecure at some time during the
year; in 8.3 percent of households, one or more of the children
were also food insecure at some time during the year; and in 0.8
percent, one or more children experienced very low food security,
in which the child's eating patterns were disrupted and their food
intake was reduced below levels considered adequate by
caregivers.
Economic Linkages Between the WIC Program
and the Farm Sector. This study used an
Input-Output Multiplier Model developed by ERS to estimate that the
$4.6 billion of food purchased with WIC vouchers in fiscal 2008
generated $1.3 billion in farm revenue based on the assumption that
the recent revisions in the WIC food packages were implemented in
all States in fiscal 2008. Given that WIC participants would
have purchased some of these foods with their own money in the
absence of the program, the net addition to farm revenue from WIC
is estimated at $331 million and the net increase in
full-time-equivalent farm jobs at 2,640.
Rising Food Prices Take a Bite Out of Food
Stamp Benefits. This report estimates the effect of
rising food prices on the purchasing power of the maximum food
stamp benefit for fiscal years (FY) 1997-2008 and the first month
(projected) of FY 2009. Findings show that the current method
of adjusting food stamp benefits for inflation results in a
shortfall between the maximum food stamp benefit and the cost of a
nutritionally adequate diet as specified by USDA's Thrifty Food
Plan. Alternative adjustment methods can reduce the shortfall
but will raise program costs.
Food Stamps and Obesity-What Do We
Know? This report reviews and interprets the
literature on the effects of food stamp participation on the weight
status of those who receive program benefits. Findings from
the reviewed studies indicate that for the majority of program
participants-children, nonelderly men, and the elderly-use of food
stamp benefits does not increase either Body Mass Index (BMI) or
the likelihood of being overweight or obese. However, for
nonelderly women, who account for 28 percent of the food stamp
caseload, some evidence suggests that participation in the
Supplemental Nutrition Assistance Program may increase BMI and the
probability of obesity.
Recent Trends in
Infant Formula Rebates in the WIC Program. Over
half of all infant formula sold in the United States is purchased
through the Special Supplemental Nutrition Program for Women,
Infants, and Children (WIC). Typically, WIC State agencies
obtain substantial discounts in the form of rebates from infant
formula manufacturers for each can of formula purchased through the
program. This report examines the recent trend in wholesale
prices, rebates, and net prices for infant formula provided through
the WIC program.
China's Food and Agriculture: Issues for the
21st Century. ERS continues to maintain an active
research program that investigates how policy and economic
developments in China affect global agricultural markets.
Recent research, China's Ongoing Agricultural Modernization:
Challenges Remain After 30 Years of Reform, points to the fact
that while the establishment of competitive markets for
agricultural inputs and outputs has helped China raise agricultural
production over the last 30 years, it faces several issues that
will be more difficult to resolve. China's ability to meet
its food and agricultural needs has exceeded the expectations of
most observers. However, agricultural productivity growth in
China has slowed in recent years, suggesting that China's potential
for achieving efficiency gains from market-based reforms is
diminishing. Chinese agriculture also faces stiff challenges
in allocating scarce natural resources and integrating small
farms-which still largely use hand-held tools-into modern, global
agricultural markets.
Developing Country Consumer Patterns. Longrun
consumer patterns are changing in middle-income developing
countries. Globalization and income growth are resulting in
increasing similarities worldwide in diets and food delivery
mechanisms. ERS research, Convergence in Global Food Demand and
Delivery, demonstrates that food-purchasing patterns and food
delivery mechanisms of high-income countries are being increasingly
copied by both upper middle-income countries (Mexico and Poland,
for example) and lower middle-income countries (Brazil and China,
for example). Middle-income countries are beginning to
resemble high-income countries in their food purchasing patterns
at both retail and foodservice outlets. Analyses of food
expenditures across 47 countries indicate significant convergence
in consumption patterns for total food, cereals, meats, seafood,
dairy, sugar and confectionery, caffeinated beverages, and soft
drinks.
World Rice Markets and Food Insecurity.
Global rice prices rose to record highs in the spring of 2008, with
trading prices tripling from November 2007 to late April 2008
according to an ERS report, Factors Behind the Rise in Global Rice Prices in
2008. The price increase was not due to crop failure or a
particularly tight global rice supply situation. Instead,
trade restrictions by major suppliers, panic buying by several
large importers, a weak dollar, and record oil prices were the
immediate cause of the rise in rice prices. Because rice is
critical to the diet of about half the world's population, the
rapid increase in global rice prices in late 2007 and early 2008
had a detrimental impact on those rice consumers' well-being.
Although rice prices have dropped more than 40 percent from their
April 2008 highs, they remain well above pre-2007 levels.
Consumption Behavior of an Aging Population.
Japan is a leading market for U.S. oranges. Since 1995,
orange consumption in Japan has declined. In Declining Orange Consumption in Japan:
Generational Changes or Something Else, ERS research examined
household survey data to determine the various factors contributing
to the decline. Consumption of oranges in Japan differs
markedly across generations, with younger generations (cohorts)
eating fewer oranges than older generations. However, within
generations, as individuals in Japan grow older, they eat more
oranges. On balance, the effects on consumption associated
with aging and birth cohort membership are mostly offsetting.
Orange prices affect consumption levels, but household income does
not. Even after the analysis accounts for price and
demographic variables, a strong downward trend is evident in orange
consumption in Japan. Results suggest that orange consumption
could decline even more in the future.