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Key Accomplishments, FY 2009

Goal 1
Goal 2
Goal 3
Goal 4

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 during October 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.


Last updated: Thursday, April 02, 2015

For more information contact: Steve Crutchfield