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 policy makers, regulators, program managers, and those shaping public debate of economic issues affecting rural development, rural well-being, farm and household income, and rural communities.

Key Accomplishments:

Alternative to State-Based ACRE: Expected Payments from Switching to a National, Crop Reporting District, or County Base. In this report, the authors simulate crop revenue variability to examine how revenue program payments and farm-level risk would change if the program's payment trigger were changed from the State level to a national, Crop Reporting District, or county level.  The analysis covers seven crops -- corn, soybeans, wheat, cotton, grain sorghum, long-grain rice, and medium/short grain rice.  The simulation results demonstrate how the change in revenue program benefits would vary across crops and regions and how benefits from the revenue programs would stack against benefits from direct payment and price-based commodity programs available under the 2008 Farm Act.

The Dodd-Frank Wall Street Reform and Consumer Protection Act: Changes to the Regulation of Derivatives and Their Impact on Agribusiness: The Dodd-Frank Wall Street Reform and Consumer Protection Act makes significant changes to Federal regulation of the U.S. over-the-counter (OTC) derivatives market, with the goals of improving market transparency and reducing systemic default risk. This article reviews some important features of the new law and discusses their potential impact on agribusiness, much of which will depend on how the rules are written and implemented by regulators.

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.

Rural America at a Glance, 2011 Edition. This brief highlights the most recent indicators of social and economic conditions in rural areas for use in developing policies and programs to assist rural areas. This year's edition focuses on the U.S. rural economy, including employment trends, poverty, education, and population trends.

Atlas of Rural and Small Town America. USDA has placed new emphasis on mobilizing local and regional assets that foster economic growth and prosperity, and on marshalling the Department's resources to better serve the strategic planning and development needs of rural communities nationwide.  This new approach to public investment and regional collaboration has increased demand for comprehensive, accessible and interactive rural data tools to support Federal, regional, and local development efforts. ERS responded to the challenge by designing and implementing theAtlas of Rural and Small Town America, a web-based mapping and data access service that brings together over 80 demographic, economic, and agricultural statistics for every county in all 50 States.  It assembles statistics in four broad categories -- people, jobs, agriculture, and geography -- that can be mapped or downloaded in an Excel file. 

Impacts of Regional Approaches to Rural Development. The Delta Regional Authority (DRA) began funding rural development projects in economically distressed counties in the Mississippi River Delta region in 2002. To assess the initial economic outcomes of DRA funding, ERS compared nonmetropolitan DRA counties with similar counties elsewhere in the same region as well as in the Southeast. Per capita income, net earnings, and transfer payments grew more rapidly in DRA counties than in similar non-DRA counties, and those impacts were stronger in counties in which DRA spending was higher. Much of the increase can be attributed to earnings growth in the health care and social services sector, and to increased medical transfer payments such as Medicare and Medicaid. Our findings suggest that investments supported by the DRA in improved medical facilities and DRA efforts to increase the supply of health care professionals may be promoting additional health sector earnings and medical transfer payments.

Federal Tax Policies and Low-Income Rural Households. The authors analyze the increasing use of refundable tax credits targeted to low- and moderate-income households in the Federal individual income tax and determine their implications for rural America. The analysis finds that expansions to both the refundable and nonrefundable portions of the Earned Income and Child Tax credits have provided a major source of income support for low-income workers and their families. This is especially true in the South, where the rural poor are concentrated.

Nonmetropolitan Outmigration Counties: Some Are Poor, Many Are Prosperous. Population loss through net outmigration is endemic to many rural areas. Over a third of nonmetro counties lost at least 10 percent of their population through net outmigration over 1988-2008. Some of these counties have had very high poverty rates, substantial loss in manufacturing jobs, and high unemployment. Lack of economic opportunity was likely a major factor in the counties' high outmigration. Most high net outmigration counties, however, are relatively prosperous, with low unemployment rates, low high school dropout rates, and average household incomes. For these counties, low population density and less appealing landscapes distinguish them from other nonmetro counties.

Cattle Sector Production Practices and Regional Price Differences. This report examines the tendency for fed cattle from the Southern Plains to typically sell at a premium over cattle from the Northern Central Plains, describing the nuances in regional production and marketing practices that underlie the price relationship referred to as "the North-South spread."

Consolidation and Structural Change in the U.S. Rice Sector. This report examines how the structure of the U.S. rice industry has evolved over the past two decades, including a reduction in the number of farms, increased average farm size, and the shifting concentration of rice production away from higher-cost production regions. The authors analyze the economic factors driving these structural changes and explore the implications of those changes for market efficiency and competitiveness of the U.S. rice industry.

Agricultural Contracting Update: Contracts in 2008. Marketing and production contracts covered 39 percent of the value of U.S. agricultural production in 2008, up from 36 percent in 2001 and 28 percent in 1991. However, aggregate contract use has stabilized in recent years. Contracts between farmers and their buyers govern the terms under which products are transferred from the farm. Contracts are far more likely to be used on large farms than on small farms, and they form one element in a package of risk management tools available to farmers. Production contracts are used widely in livestock production, while marketing contracts are important to the production of many crops.

Fruit and Vegetable Planting Restrictions: Analyzing the Processing Cucumber Market. This report highlights the anticipated consequences of the 2008 Farm Act's Planting Transferability Pilot Program (PTPP) on processing (pickling) cucumber plantings. PTPP allows program crop growers in seven Upper Midwestern States to reduce base acres and plant select vegetables for processing on those acres without reducing Government payments on their remaining base acres.

An Analysis of the Limited Base Acre Provision of the 2008 Farm Act. The Food, Conservation, and Energy Act of 2008 eliminates direct and countercyclical payments (DCP) and average crop revenue election program payments to farms with 10 or fewer base acres. This study examined the effects of the provision. Findings suggest that Federal budgetary savings from the provision are small. In 2009, nearly 371,000 of the Nation's 2.2 million farms had 10 or fewer base acres (not including farms owned by limited-resource and socially disadvantaged farmers, which are exempt from the provision). However, not all farms with 10 or fewer base acres participate in the DCP program. Based on the 2008 enrollment rate, 148,400 farms would no longer receive DCP, estimated at $11.7 million in 2009. The effect of the provision varies among U.S. regions, with a larger portion of newly ineligible farms found on or near the East Coast.

Policy Reform in the Tobacco Industry: Producers Adapt to a Changing Market. The Fair and Equitable Tobacco Reform Act of 2004 eliminated tobacco quotas and tobacco price supports and allowed producers to plant any amount or type of tobacco regardless of geographic location. The authors found that flue-cured tobacco producers made greater adjustments to their operations after the buyout than did burley tobacco producers. Flue-cured tobacco producers were more likely to increase tobacco acres per farm, pushing up the tobacco acreage per farm at a faster rate compared with burley tobacco producers. Flue-cured producers also were more likely to invest in their tobacco enterprises and invested more per farm after 2004. As a result of increased acreage, tobacco operations became more sensitive to changes in labor costs. With over 75 percent of tobacco farms using hired or contract labor in 2008, the availability and cost of workers have become increasingly important to tobacco producers.

Financial Characteristics of Vegetable and Melon Farms: This report presents a financial snapshot of U.S. vegetable and melon farms by region and farm size over three 3-year periods (1999-2007).

Market Issues and Prospects for U.S. Distillers' Grains Supply, Use, and Price Relationships: Growth in corn dry-mill ethanol production has surged in the past several years, simultaneously creating a coproduct -- distillers' dried grains with soluble (DDGS). Many in the U.S. feed industry were concerned about the size of this new feed source and whether it could be used entirely by the feed industry, but they also worried about the price discovery process for the product. This report provides a transparent methodology to estimate U.S. supply and consumption of DDGS. Potential domestic and export use of U.S. DDGS exceeds current production and is likely to exceed future production as ethanol production continues to grow. The authors identify the DDGS price discovery process along with the price relationships of distillers' grains, corn, and soybean meal.

The U.S. Produce Industry and Labor: Facing the Future in a Global Economy. Fruit and vegetable production is labor-intensive, and over half of the hired workers employed by U.S. growers are believed to be unauthorized immigrants. Reforms to immigration laws, if they reduce the labor supply, may increase the cost of farm labor. This report assesses how particular fruit and vegetable commodities might adjust if labor rates increased. Analysis of case studies suggests a range of possible adjustment scenarios, including increased mechanization for some crops, reduced U.S. output for a few crops, and increased use of labor aids to improve labor productivity for others.

Effects of Increased Biofuels on the U.S. Economy in 2022. Achieving greater energy security by reducing dependence on foreign petroleum is a goal of U.S. energy policy. The Energy Independence and Security Act of 2007 (EISA) calls for a Renewable Fuel Standard (RFS-2), which mandates that the United States increase the volume of biofuel that is blended into transportation fuel from 9 billion gallons in 2008 to 36 billion gallons by 2022. Long-term technological advances are needed to meet this mandate. This report examines how meeting the RFS-2 would affect various key components of the U.S. economy. If biofuel production advances with cost-reducing technology and petroleum prices continue to rise as projected, the RFS-2 could provide economywide benefits. However, the actual level of benefits (or costs) to the U.S. economy depends on future oil prices and whether tax credits are retained in 2022. If oil prices stabilize or decline from current levels and tax credits are retained, then benefits to the economy would diminish.

Impacts of Higher Energy Prices on Agriculture and Rural Economies. Agricultural production is sensitive to changes in energy prices, either through energy consumed directly or through energy-related inputs such as fertilizer. A number of factors can affect energy prices faced by U.S. farmers and ranchers, including developments in the oil and natural gas markets, and energy taxes or subsidies. Climate change policies could also affect energy prices as a result of taxes on emissions, regulated emission limits, or the institution of a market for emission reduction credits. Higher energy-related production costs would generally lower agricultural output, raise prices of agricultural products, and reduce farm income, regardless of the reason for the energy price increase. Nonetheless, farm sector impacts were modest for the scenarios and time periods examined.

Estimating the Substitution of Distillers' Grains for Corn and Soybean Meal in the U.S. Feed Complex. Corn-based dry-mill ethanol production and its coproducts -- notably distillers' dried grains with soluble (DDGS) -- have surged in recent years. This study estimated the potential substitution of DDGS for corn and soybean meal in livestock feeding and the impact of substitution upon the U.S. feed complex.

The Renewable Identification Number System and U.S. Biofuel Mandates. This study provided an overview of how the Renewable Identification Number (RIN) market works to ensure compliance with the Renewable Fuel Standard provision of the Energy Independence and Security Act, as well as how RIN prices are determined and which factors influence their prices.

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 policy makers, 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:

Trends and Developments in Hog Manure Management: 1998-2009.  In the past decade, hog production has become increasingly consolidated, with larger operations producing a greater volume of hog manure on smaller areas. With less cropland for spreading the manure, hog farmers may be compensating through more effective manure management. The authors use data from 1998 to 2009 collected in three national surveys of hog farmers. Over this period, structural changes in the hog sector altered how manure is stored and handled. Changes to the Clean Water Act, State regulations, and local conflicts over air quality also affected manure management decisions. The findings further suggest that environmental policy has influenced conservation-compatible manure management practices. The authors examine how the use of nutrient management plans and of practices such as controlled manure application rates vary with scale of production and how these practices changed over the study period.

Public Agricultural Research Spending and Future U.S. Agricultural Productivity Growth.  By 2050, global agricultural demand is projected to grow by 70-100 percent due to population growth, energy demands, and higher incomes in developing countries. Meeting this demand from existing agricultural resources will require raising global agricultural total factor productivity (TFP) by a similar level. TFP growth of U.S. agriculture has averaged about 1.5 percent annually over the past 50 years, but stagnant (inflation-adjusted) funding for public agricultural research since the 1980s may be causing agricultural TFP growth to slow. ERS simulations indicate that if U.S. public agricultural R&D spending remains constant (in nominal terms) until 2050, the annual rate of agricultural TFP growth will fall to under 0.75 percent and U.S. agricultural output will increase by only 40 percent by 2050.

Measuring the Indirect Land-Use Change Associated With Increased Biofuel Feedstock Production. A Review of Modeling Efforts: Report to Congress. The House Report 111-181 accompanying H.R. 2997 -- the 2010 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Bill -- requested that ERS, in conjunction with the Office of the Chief Economist, conduct a study of land-use changes for renewable fuels and the feedstocks used to produce them. This report identifies the drivers of land-use change and describes the analytic methods used to estimate the impact of biofuel feedstock production on land use. The amount of pressure placed on land internationally will depend in part on how much of the land needed for biofuel production is met through an expansion of agricultural land in the United States. If crop yield per acre increases through more intensive management or new crop varieties, then less land is needed to grow a particular amount of that crop.

The Ethanol Decade: An Expansion of U.S. Corn Production, 2000-09.  The recent 9-billion-gallon increase in corn-based ethanol production -- which resulted from a combination of rising gasoline prices and a suite of Federal bioenergy policies --indicates how farmers altered their land-use decisions in response to increased demand for corn. As some forecasts had suggested, corn acreage increased mostly on farms that previously specialized in soybeans. Other farms, however, offset this shift by expanding soybean production. Farm-level data reveal that the simultaneous net expansion of corn and soybean acreage resulted from a reduction in cotton acreage, a shift from uncultivated hay to cropland, and the expansion of double cropping (consecutively producing two crops of either like or unlike commodities on the same land within the same year).

Grassland-to-Cropland Conversion in the Northern Plains. Farm commodity programs, crop insurance, disaster payments, and other Federal agricultural programs may have encouraged producers to convert native grassland to crop production. The conversion of grassland to crop production could damage this habitat and affect bird populations.  This report finds that: (1) roughly 770,000 acres (1 percent) of 1997 rangeland acreage in the Northern Plains were converted to cultivated crops by 2007; (2) a 5-year ban on crop insurance purchase for converted grassland could slow but is unlikely to stop grassland-to-cropland conversion; and (3) the benefits of crop insurance, disaster assistance, and marketing loans increased cropland acreage by about 2.9 percent between 1998 and 2007.

Climate Change Policy and the Adoption of Methane Digesters on Livestock Operations. Methane digesters -- biogas recovery systems that use methane from manure to generate electricity -- have not been widely adopted in the United States because costs have exceeded benefits to operators.  Burning methane in a digester reduces greenhouse gas emissions from manure management.  A policy or program that pays producers for these emission reductions -- through a carbon offset market or directly with payments -- could increase the number of livestock producers who would profit from adopting a methane digester. This report presents an economic model that illustrates how dairy and hog operation size, location, and manure management methods, along with electricity and carbon prices, could influence methane digester profits. Companion reports show that a relatively moderate increase in the price of carbon could induce significantly more dairy and hog operations, particularly large ones, to adopt a methane digester.

"No-Till" Farming Is a Growing Practice. Most U.S. farmers prepare their soil for seeding and weed/pest control through tillage-plowing operations that disturb the soil. Tillage practices affect soil carbon, water pollution, and farmers' energy and pesticide use. Data on tillage can be valuable for understanding the practice's role in meeting climate and other environmental goals.  Data from the Agricultural Resource Management Survey show that approximately 35.5 percent of U.S. cropland planted to 8 major crops -- or 88 million acres -- had no tillage operations in 2009.

The Influence of Rising Commodity Prices on the Conservation Reserve Program. This report considers how increased commodity prices might influence enrollment in and benefits from the Conservation Reserve Program (CRP).  Under several higher crop price scenarios, maintaining the CRP as currently configured will lead to significant expenditure increases. If constraints are placed on increasing rental rates, it might be possible to meet enrollment goals with moderate increases in CRP rental rates -- but this will mean accepting lower average Environmental Benefits Index scores as landowners with profitable but environmentally sensitive lands choose not to enroll.

Nitrogen in Agricultural Systems and the Environment.  Agriculture has been identified as the largest source of impairment for remaining water quality problems in the U.S.  This research project focuses on the agricultural dimensions of water quality problems and the economic costs and benefits of improving water quality.  In particular, researchers evaluate issues in the design of nonpoint-source pollution control policies for reducing nutrients' impacts on water resources and the influences of regulation on agricultural decisions.  Of particular interest is a focus on how different baseline requirements used in water quality trading programs affect the cost of credits and farmers' willingness to participate.  The study also considers the implications of alternative pathways for nitrogen-based emissions, and whether there are environmental tradeoffs, like between water quality and greenhouse gas.

Recent Adoption of Precision Agriculture. The adoption of precision agriculture, which encompasses a suite of farm-level information technologies, can improve the efficiency of input use and reduce environmental harm from the overapplication of inputs such as fertilizers and pesticides. Still, the adoption of precision agricultural technologies and practices has been less rapid than envisioned a decade ago. This report examines trends in the adoption of four key information technologies-yield monitors, variable -- rate application technologies, guidance systems, and GPS maps -- in the production of major field crops. While yield monitoring is now used on over 40 percent of U.S. grain crop acres, very few producers have adopted GPS maps or variable-rate input application technologies.

USDA Priority Goal 3:  Help America promote agricultural production and biotechnology exports as America works to increase food security;

Key Outcome: 

Enhanced understanding by policy makers, 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

International Food Security Assessment, 2011-21. The number of food-insecure people in developing countries is estimated to decline from 861 million in 2010 to 852 million in 2011, and to decline by 16 percent, or nearly 140 million, over the next decade. Food security in Asia and the Latin America/Caribbean region is projected to improve, whereas food security in Sub-Saharan Africa is expected to deteriorate. Food-insecure people are defined as those consuming less than the nutritional target of roughly 2,100 calories per day per person.

International Food Security Assessment, 2010 Update: Improved Production Mitigated Impact of Higher Food Commodity Prices. Rising global food commodity prices have again focused attention on agriculture and food security. This report reviews the impact of high global food commodity prices on food security in 2010 in 70 lower income countries using actual 2010 price and food production information.

European Financial Imbalances: Implications of the Eurozone Sovereign Debt Problem for U.S. Agricultural Exports. This report discusses Eurozone sovereign debt problems that began in 2010 and their potential consequences for the European Union (EU) and U.S. agriculture.

Selected Trade Agreements and Implications for U.S. Agriculture. Since 2001, the United States has concluded negotiations with 13 countries, resulting in 8 trade agreements (TAs). Other countries have become increasingly active in negotiating their own trade pacts. This proliferation of TAs between key U.S. trading partners and competitors may raise concerns among U.S. exporters, whose share in established markets could be eroded by such deals. In this study, ERS examines how recently concluded TAs between ASEAN (Southeast Asia) countries and China and Australia/New Zealand -- as well as pending TAs between the United States and Korea, Colombia, and Panama -- will likely affect U.S. agricultural trade. Model results suggest that TAs between ASEAN countries and China and ASEAN countries and Australia/New Zealand would result in annual losses to U.S. agricultural exports of about $350 million to those countries, but losses would be partially offset by gains in other markets. U.S. agricultural exports to Korea would expand by an estimated $1.9 billion per year if the U.S. TA with Korea were implemented. The U.S.-Colombia TA would result in an estimated $370 million in additional U.S. exports per year. U.S. exports would realize smaller gains of about $50 million per year under the pact with Panama. Empirical results confirm theoretical findings that trade created under TAs exceeds trade diverted, but that results depend on the specific circumstances of each agreement.

Reciprocal Trade Agreements: Impacts on Bilateral Trade Expansion and Contraction in the World Agricultural Marketplace. The proliferation of bilateral and regional free-trade agreements since 1995 has raised questions about whether they have, in fact, opened markets, created trade, promoted economic growth, and/or distorted trade. This study uses panel data from 1975 to 2005 and a gravity framework model to identify the influence of reciprocal trade agreements (RTAs) on bilateral trade in the world agricultural marketplace. A benchmark, Heckman sample-selection and two generalized models, one of which accounts for RTA phase-in effects, are used to gauge the impact on partner trade of mutual as well as asymmetric RTA membership. Empirical results show that RTAs increase agricultural trade between member countries but decrease trade between member and nonmember countries. Interestingly, RTAs were found to be particularly effective at expanding agricultural trade and opening markets in developing countries when developing-country trading partners are part of the same agreement.

NAFTA at 17: Full Implementation Leads to Increased Trade and Integration: This report is the last in USDA's series of congressionally mandated biennial reports on the impacts of the North American Free Trade Agreement (NAFTA) on U.S. agriculture and the rural economy. The report responds to a mandate in the North American Free Trade Agreement Implementation Act of 1993.

Classifying and Measuring Agricultural Support: Identifying Differences Between the WTO and OECD Systems. Most countries provide some level of support to their agricultural sectors. Because support can affect producers and consumers in other countries, a number of systems have been developed to measure agricultural support levels and classify types of support in ways that facilitate comparing them across countries. The WTO and OECD employ similar classification systems, generally addressing the same question and measuring the same programs. However, results can be surprisingly and fundamentally different, rendering comparisons inappropriate, meaningless, or even wrong. Careful attention to the sources of difference can prevent potential misunderstandings and misleading uses.

The Expansion of Modern Grocery Retailing and Trade in Developing Countries. Over the past few decades, modern grocery retailing has been expanding rapidly in developing countries. The implications for food demand and trade are influenced by the extent to which modern food retailers focus primarily on growing preferences for nonprice characteristics -- such as dietary diversity, convenience, and quality -- as opposed to introducing supply chain efficiencies that may reduce real food prices over time. Based on a data set of 103 developing countries, there is evidence that the expansion has been associated with growth in demand for nonprice characteristics, such as convenience in food shopping and preparation. On the other hand, growth in modern food retailing appears to be uncorrelated with variables indicative of the emergence of more efficient food supply chains. The impacts of modern grocery retailing in developing countries are potentially important to U.S. agricultural markets. Growth in developing country imports of U.S. agricultural products has outpaced growth in developed-country imports in the 1990s and 2000s, with developing countries accounting for 64 percent of U.S. agricultural exports during 2007-09.

Brazil's Ethanol Industry: Looking Forward. This report profiles and analyzes Brazil's ethanol industry, providing information on the policy environment that enabled the development of feedstock and processing sectors, and discusses the various opportunities and challenges that face the industry over the next decade.

Brazil's Cotton Industry: Economic Reform and Development. This report identifies the factors contributing to the cycles in Brazil's cotton production and exports that have made the country both an important market for U.S. cotton exports and a competitor with U.S. cotton producers since 1990.

Investment in Processing Industry Turns Chinese Apples Into Juice Exports. This report analyzes the remarkable growth in China's apple juice concentrate exports since the 1990s and the factors behind the growth. The industry is a prime example of how capital investment and government policies bring China's labor-intensive agricultural products into the world market in the form of processed food and beverage products.

The U.S. and Mexican Dry Bean Sectors. This report examines the significance of dry bean trade to the member countries of the North American Free Trade Agreement (NAFTA); provides a detailed look at supply, demand, and policy in the U.S. and Mexican dry bean sectors; and considers the outlook for these industries.

Trade, The Expanding Mexican Beef Industry, and Feedlot and Stocker Cattle Production in Mexico. This report characterizes Mexican feeder-calf and fed cattle production systems in the context of the imports of Mexican feeder cattle into the United States. The growth in cattle feeding in Mexico will increasingly affect U.S. feeder cattle imports and U.S. beef exports to Mexico as Mexican population and incomes increase. Cattle production also depends on climatic factors, disease and pest challenges, feeding systems, and feeder cattle export patterns.

Wheat Flour Price Shocks and Household Food Security in Afghanistan. This report uses a unique nationally representative household survey from Afghanistan, one of the world's poorest, most food-insecure countries to investigate the impact of rising staple food prices on household food security. The econometric framework allows the authors to control for household, district, and province factors and to isolate the effects of the sudden (2008) rise in wheat flour prices on several measures of household well-being related to food security. The results show large declines in food consumption and dietary diversity, but smaller declines in calories consumed. The evidence suggests that households choose to trade off quality for quantity, as they moved toward staple foods and away from micronutrient-rich foods, such as meat and vegetables. Additionally, for urban areas, the evidence suggests that wheat is a Giffen good; that is, as the price of wheat flour increases, demand for wheat products also increases. These findings may provide useful information for domestic and international policymakers and development agencies as they continue to confront the challenges of improving food security in this conflict-affected country.

Peru: An Emerging Exporter of Fruits and Vegetables. This report provides an overview of performance, advantages, and challenges of the Peruvian fruit and vegetable export industry. Three commodity case studies -- asparagus, processed artichokes, and table grapes -- highlight different degrees of competition with U.S. industries and trade impacts on U.S. growers.

The Role of Contracts in the Organic Supply Chain: 2004 and 2007. Organic food products are excellent candidates for contract production and marketing because they are produced using a distinct process and are in high demand. This report summarizes survey data on contracting in the organic sector, addressing the extent of contracting, the rationale for using contracts, and contract design for select commodities. The central survey data were collected from certified organic handlers (intermediaries) in the United States who marketed and procured organic products in 2004 and 2007. Contracting is widespread in the organic sector, and, in 2007, firms used contracts most frequently to secure organic products essential to their business and to source products in short supply. Large firms were more likely to use contracts for procurement, and these firms contracted for a larger share of their procurement needs. Nearly all contracts required suppliers to provide evidence of organic certification.

Characteristics of Conventional and Organic Apple Production in the United States. While U.S. acreage and production of apples has declined in recent years, consumer demand has spurred a fast-growing organic apple sector. Apples managed under certified organic farming systems now account for about 6 percent of total U.S. apple acreage, according to data from a special version of the Agricultural Resource Management Survey (ARMS). While conventional apple yields were higher than organic yields in 2007, organic apples commanded a price premium at every level -- farm-gate, wholesale and retail -- of the supply chain.

Development of a U.S. Sanitary and Phytosanitary Regulation Database.  ERS published its annual update of the database, Phytosanitary Regulation of Fresh Fruits and Vegetables in to the United States.  This data product identifies which countries, under USDA phytosanitary rules, are eligible to export to the United States the fresh fruits and vegetables that are most popular in the American diet, using data and information from USDA's Animal and Plant Health Inspection Service (APHIS), the United Nations Food and Agriculture Organization (FAO), and the World Bank.   The data product underpins ongoing research on impacts of different types of phytosanitary measures  -- such as fumigation, irradiation, or cold treatment -- on the level and composition of U.S. imports of fresh fruits and vegetables from countries around the world.

USDA Priority Goal 4: Ensure that all of America's children have access to safe, nutritious, and balanced meals.

Key Outcome:

Enhanced understanding by policy makers, 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

Household Food Security in the United States in 2010.  An estimated 85.5 percent of American households were food secure throughout the entire year in 2010, meaning that they had access at all times to enough food for an active, healthy life for all household members. The remaining households (14.5 percent) were food insecure at least some time during the year, including 5.4 percent with very low food security -- meaning that the food intake of one or more household members was reduced and their eating patterns were disrupted at times during the year because the household lacked money and other resources for food. The prevalence of very low food security declined from 5.7 percent in 2009, while the change in food insecurity overall (from 14.7 percent in 2009) was not statistically significant. The typical food-secure household spent 27 percent more on food than the typical food-insecure household of the same size and household composition. Fifty-nine percent of all food-insecure households participated in one or more of the three largest Federal food and nutrition assistance programs during the month prior to the 2010 survey.

Statistical Supplement to Household Food Security in the United States in 2010.  This Supplement provides the primary national statistics on household food security, food spending, and use of Federal food and nutrition assistance programs by food-insecure households. It provides additional statistics on component items of the household food security measure, the frequency of food-insecure conditions, and selected statistics on household food security, food spending, and use of Federal and community food and nutrition assistance programs.

How Americans Rate Their Diet Quality: An Increasingly Realistic Perspective.  Over the last 20 years, awareness of diet-related health concerns has become widespread in the United States as obesity, along with its associated human and financial costs, has increased. To estimate how this awareness affects Americans' perceptions of their own diet quality over this period and the factors associated with self-assessed diet health, the authors examine data from both the 1989-91 Continuing Survey of Food Intakes of Individuals and the 2005-08 Flexible Consumer Behavior Survey module of the National Health and Nutrition Examination Survey. Americans have become much less likely to rate their diets as "Excellent" or "Very Good" in terms of healthfulness, even though the healthfulness of the American diet has undergone little change over 1989-2008. Current self-ratings of diet are inversely related to the frequency of fastfood and food-away-from-home consumption and positively related to the frequency of sharing meals with family. In addition, self-ratings of diet are positively associated with household availability of dark green vegetables and low-fat milk and negatively associated with availability of sweetened soft drinks.

Why Have Food Commodity Prices Risen Again? The report describes the factors that have contributed to the large and rapid increase in agricultural prices, particularly food commodity prices, which rose 60 percent from June 2010 to June 2011.

The Food Desert Locator Mapping Tool.  In May 2011, ERS released a new mapping tool, the Food Desert Locator that can be used to assist efforts to expand the availability of nutritious food in food deserts, or low-income communities that lack ready access to healthy food. Expanding the availability of nutritious food is part of First Lady Michele Obama'sLet's Move! initiative to address the epidemic of childhood obesity.  A food desert is a low-income census tract where either a substantial number or share of residents has low access to a supermarket or large grocery store. "Low-income" tracts are defined as those where at least 20 percent of the people have income at or below the Federal poverty levels for family size, or where median family income for the tract is at or below 80 percent of the surrounding area's median family income. Tracts qualify as "low access" tracts if at least 500 persons or 33 percent of the population live more than a mile from a supermarket or large grocery store (for rural census tracts, the distance is more than 10 miles).

Direct and Intermediated Marketing of Local Foods in the United States. This research documents that sales through intermediated marketing channels, such as farmers' sales to local grocers and restaurants, account for a large portion of all local food sales. Small and medium-sized farms dominate local foods sales marketed exclusively through direct-to-consumer channels (foods sold at roadside stands or farmers' markets, for example) while large farms dominate local food sales marketed exclusively through intermediated channels. Farmers marketing food locally are most prominent in the Northeast and the West Coast regions and areas close to densely populated urban markets. Climate and topography favoring the production of fruits and vegetables, neighboring farm participation in and proximity to farmers' markets, and good transportation and information access are associated with higher levels of direct-to-consumer sales.

A Revised and Expanded Food Dollar Series: A Better Understanding of Our Food Costs. The new ERS food dollar series measures annual expenditures on domestically produced food by individuals living in the United States and provides a detailed answer to the question "For what do our food dollars pay?" This data product replaces the old marketing bill series, which was discontinued due to measurement problems and limited scope. The new food dollar series is composed of three primary series. The marketing bill series, like the old marketing bill series, identifies the distribution of the food dollar between farm and marketing shares. The industry group series identifies the distribution of the food dollar among 10 distinct food supply chain industry groups. The primary factor series identifies the distribution of the food dollar in terms of U.S. worker salaries and benefits, rents to food industry property owners, taxes, and imports. Each of the three primary series is further disaggregated by commodity groupings (food/food and beverage), expenditure categories (total food expenditures, food at home, food away from home), and two dollar denominations.

How Much Lower Are Prices at Discount Stores? An Examination of Retail Food Prices. Nontraditional stores -- including mass merchandisers, supercenters, club warehouse and dollar stores -- have increased their food offerings over the past 15 years and often promote themselves as lower priced alternatives to traditional supermarkets. How much lower are food prices at these stores? In order to better understand nontraditional stores' impact on the cost of food, ERS analysts evaluated food price differences between nontraditional and traditional stores at the national and market level. Nontraditional retailers offer lower prices than traditional stores even after controlling for brand and package size. Comparisons of identical items, at the Universal Product Code (UPC) level, show an expenditure-weighted average price discount of 7.5 percent, with differences ranging from 3 to 28 percent lower in nontraditional stores than in traditional stores.

International Evidence on Food Consumption Patterns: An Update Using 2005 International Comparison Program Data. This report updates a 2003 report with estimated income and price elasticities of demand for broad consumption categories and food categories across 144 countries using 2005 International Comparison Program (ICP) data. Advances in ICP data collection since 1996 led to better results and more accurate income and price elasticity estimates. Low-income countries spend a greater portion of their budget on necessities, such as food, while richer countries spend a greater proportion of their income on luxuries, such as recreation. Low-value staples, such as cereals, account for a larger share of the food budget in poorer countries, while high-value food items are a larger share of the food budget in richer countries. Overall, low-income countries are more responsive to changes in income and food prices and, therefore, make larger adjustments to their food consumption pattern when incomes and prices change. However, adjustments to price and income changes are not uniform across all food categories. Staple food consumption changes the least, while consumption of higher-value food items changes the most.

How Much Time Do Americans Spend on Food?  Data from the 2006-08 ERS Eating & Health Module of the American Time Use Survey were examined to present an overview of Americans' eating and other food-related time use patterns, including grocery shopping and meal preparation, and teenage time use patterns in relation to school meals. On an average day, Americans age 15 and older spent 67 minutes eating and drinking as a "primary" or main activity, and 23.5 minutes eating and 63 minutes drinking beverages (except plain water) while doing something such as watching television, driving, or working. Eleven percent of the population spent at least 4.5 hours on an average day engaged in eating and drinking activities.

The Food Assistance Landscape, FY 2010. The U.S. Department of Agriculture (USDA) administers 15 domestic food and nutrition programs that provide a nutritional safety net for millions of children and low-income adults. The programs, which serve one in four Americans at some point during the year, are especially important during economic downturns. Accounting for over two-thirds of USDA's budget, the programs represent a significant Federal investment. This report is based on preliminary data from USDA's Food and Nutrition Service (FNS), the agency responsible for managing the programs. Trends in the food and nutrition assistance programs through fiscal 2010 (October 1, 2009 to September 30, 2010) are examined.

How Much Do Fruits and Vegetables Cost? Federal dietary guidance advises Americans to consume more vegetables and fruits because most Americans do not consume the recommended quantities or variety. Food prices -- along with taste, convenience, income, and awareness of the link between diet and health -- shape food choices. ERS estimated the average retail price of a pound and an edible cup equivalent (or, for juices, a pint and an edible cup equivalent) of 153 commonly consumed fresh and processed fruits and vegetables and found that average prices ranged from less than 20 cents per edible cup equivalent to more than $2 per edible cup equivalent. Based on 2008 data, an adult on a 2,000-calorie diet could satisfy recommendations for vegetable and fruit consumption in the 2010 Dietary Guidelines for Americans (amounts and variety) at an average price of $2 to $2.50 per day.

Consumer-Level Food Loss Estimates and Their Use in the ERS Loss-Adjusted Food Availability Data. ERS's Food Availability (per capita) Data System tracks annual food and nutrient availability for many commodities. Since the Food Availability data series overstates actual consumption, ERS has included an additional series, Loss-Adjusted Food Availability, to adjust the food availability data for nonedible food parts and food losses, including losses from farm to retail, at retail, and at the consumer level. In this report, the authors propose new consumer-level loss estimates for "cooking loss and uneaten food" of the edible share to replace those currently used in the Loss-Adjusted Food Availability data and propose their adoption for the entire data span (1970 to the most recent year in the series). The proposed loss percentages are calculated by subtracting food consumption estimates from food purchase or availability estimates for each food. These calculations are adjusted with information from an expert panel experienced in analyzing food consumption data. If the proposed loss estimates were to be used in the ERS loss-adjusted series, the average American would consume 17.3 pounds less each year, or 41.9 fewer calories per day, than suggested by the currently used loss estimates.

WIC Participation Patterns: An Investigation of Delayed Entry & Early Exit. Despite the health benefits of participation, many eligible households do not participate in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). While roughly half of infants born in the United States receive WIC benefits, USDA statistics indicate that eligible pregnant women and children 1-5 years of age are far less likely to participate in WIC than eligible infants and postpartum women. This implies that a number of pregnant women delay enrollment until after having a child, and that many households leave the program when a participating child turns 1 year old. Research on the factors that influence the dynamics of WIC participation inform outreach and targeting efforts, so that vulnerable populations receive adequate exposure to the benefits of WIC participation.

The Infant Formula Market: Consequences of a Change in the WIC Contract Brand. The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) is the major purchaser of infant formula in the United States. To reduce cost to the WIC program, each State awards a sole-source contract to a formula manufacturer to provide its product to WIC participants in the State. As part of the contract, the WIC State agency receives rebates from the manufacturers. This study finds that the manufacturer holding the WIC contract brand accounted for the vast majority -- 84 percent -- of all formula sold by the top three manufacturers. The impact of a switch in the manufacturer that holds the WIC contract was considerable. The market share of the manufacturer of the new WIC contract brand increased by an average 74 percentage points after winning the contract. Most of this increase was a direct effect of WIC recipients switching to the new WIC contract brand. However, manufacturers also realized a spillover effect from winning the WIC contract whereby sales of formula purchased outside of the program also increased.

An Analysis of U.S. Household Dairy Demand. This report examines retail purchase data for 12 dairy products and margarine from 2007 Nielsen-Homescan data. Selected demographic and socioeconomic variables included in the Nielsen data are analyzed for their effects on aggregate demand and expenditure elasticities for the selected products. A censored demand system is used to derive the demand elasticities. The resulting estimates revealed that the magnitudes of 10 of the 13 own-price elasticities are greater than 1; substitute relationships are found among most dairy categories; expenditure elasticities are 1 or greater for 7 of the 13 products; and demographic and socioeconomic variables are statistically significant contributors to dairy demand.

How Retail Beef and Bread Prices Respond to Changes in Ingredient and Input Costs. The extent to which cost changes pass through a vertically organized production process depends on the value added by each producer in the chain as well as a number of other organizational and marketing factors at each stage of production. Using monthly Bureau of Labor Statistics price indices data from1972 to 2008, ERS modeled pass-through behavior for beef and bread, two retail food items with different levels of processing. Broad differences in price behavior are found not only between food categories (retail beef prices respond more to farm-price changes than do retail bread prices) but also across stages in the supply chain. While farm-to-wholesale relationships generally appear to be symmetric, retail prices have a more complicated response behavior. For both bread and beef, the passthrough from wholesale to retail is weaker than that from farm to wholesale.

The WIC Fruit and Vegetable Cash Voucher: Does Regional Price Variation Affect Buying Power? The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) provides supplemental foods to low-income women, infants, and children at nutritional risk. Since October 2009, WIC packages have included a fixed-value voucher for purchasing fruits and vegetables. Although this should help increase fruit and vegetable consumption for all WIC participants, regional price variation could lead to different buying power -- and nutritional benefits -- across the country. ERS examined the prices of fruits and vegetables (fresh, frozen, and canned) in 26 metropolitan market areas to determine how price variations affect the voucher's purchasing power. The 20 most commonly purchased fruits and vegetables cost 30-70 percent more in the highest priced market areas than in the lowest. The lowest priced market for fruits and vegetables was the Nashville/Birmingham/Memphis/Louisville area, while the highest was San Francisco.

School Foodservice Costs: Location Matters. Over 42 million meals -- 31.2 million lunches and 11 million breakfasts -- were served on a typical school day in fiscal year 2009 to children through USDA's National School Lunch and School Breakfast Programs. School food authorities (SFAs) operate local school feeding programs and deliver the meals to the schools. SFAs must serve appealing, healthful meals while covering food, labor, and other operating costs, a challenge that may be more difficult for some SFAs than for others due to differences in costs per meal across locations. Analysis of data on school costs per meal from a large, nationally representative sample reveals that geographic variation is important. In the 2002-03 school year, SFAs in the Southwestern United States had, on average, consistently lower foodservice costs per meal than did SFAs in other regions. Urban locations had lower costs per meal than did their rural and suburban counterparts. Wage and benefit rates, food expenditures per meal, and SFA characteristics such as the mix of breakfasts and lunches served each contributed to the differences in foodservice costs per meal across locations.

How Food Away From Home Affects Children's Diet Quality. This study estimates how consumption of (1) food away from home, (2) food from school, and (3) caloric sweetened beverages affects a child's diet quality and calorie consumption. Compared with meals and snacks prepared at home, food prepared away from home increases caloric intake of children, especially older children. Each food-away-from-home meal adds 108 more calories to daily total intake among children ages 13-18 than a snack or meal from home; all food from school is estimated to add 145 more calories. Both food away from home and all food from school also lower the daily diet quality of older children (as measured by the 2005 Healthy Eating Index). Among younger children, who are more likely than older children to eat a USDA school meal and enjoy a more healthful school food environment, the effect of food from school on caloric intake and diet quality does not differ significantly from that of food from home.

The Food Assistance National Input-Output Multiplier (FANIOM) Model and Stimulus Effects of SNAP. ERS's Food Assistance National Input-Output Multiplier (FANIOM) model measures linkages between USDA's domestic food assistance programs, agriculture, and the U.S. economy. This report describes the data sources and the underlying assumptions and structure of the FANIOM model and illustrates its use to estimate the multiplier effects from benefits issued under the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program). During an economic downturn, an increase in SNAP benefits provides a fiscal stimulus to the economy through a multiplier process. The report also examines the different types of multipliers for different economic variables that are estimated by input-output multiplier and macroeconomic models and considers alternative estimates of the jobs impact. FANIOM's GDP multiplier of 1.79 for SNAP benefits is comparable with multipliers from other macroeconomic models.

The U.S. Food Environment Atlas. The Atlas is a web-based mapping tool developed by ERS that allows users to compare U.S. counties in terms of their food environment -- the set of factors that help determine and reflect a community's access to affordable, healthy food.  The updated (2011) Atlas contains 168 indicators of the food environment, up from the original 90, measuring factors such as availability of food stores and restaurants, food prices, socioeconomic characteristics, and health outcomes.  Since factors such as store/restaurant proximity, food prices, food and nutrition assistance programs, and community characteristics interact to influence food choices and diet quality, the Atlas allows users to get data on any and all of the county-level indicators for a particular county. 

Food Security Improved Following the 2009 ARRA Increase in SNAP Benefits. The American Recovery and Reinvestment Act of 2009 increased benefit levels for the Supplemental Nutrition Assistance Program (SNAP, formerly known as the Food Stamp Program) and expanded SNAP eligibility for jobless adults without children. One goal of the program changes was to improve the food security of low-income households. ERS found that food expenditures by low-income households increased by about 5.4 percent and their food insecurity declined by 2.2 percentage points from 2008 to 2009. Food security did not improve for households with incomes above the SNAP eligibility range. These findings, based on data from the nationally representative Current Population Survey Food Security Supplement, suggest that the ARRA SNAP enhancements contributed substantially to improved food security for low-income households.

Geographic Differences in the Relative Price of Healthy Foods. Although healthy foods can be affordable, if less healthy foods are cheaper, individuals may have an economic incentive to consume a less healthful diet. Using the Quarterly Food-at-Home Price Database, ERS explored whether a select set of healthy foods are more expensive than less healthy alternatives. Not all healthy foods were found to be more expensive than less healthy alternatives; skim and 1% milk are less expensive than whole and 2% milk and bottled water is generally less expensive than carbonated drinks. The relative price of healthy foods varies widely by region.

The Effect of Food and Beverage Prices on Children's Weights. One factor that may be important in explaining rising childhood obesity is food prices. This report explores the effect of food prices on children's Body Mass Index (BMI) using data from the Early Childhood Longitudinal Study, Kindergarten Class of 1998-99 (ECLS-K) and the Quarterly Food-at-Home Price Database. On average, higher prices for soda, 100 percent juices, starchy vegetables, and sweet snacks are associated with lower BMIs among children. In addition, lower prices for dark green vegetables and lowfat milk are associated with reduced BMI. The effect of subsidizing healthy food may be just as large as raising prices of less healthy foods.

Foodborne Illness Cost Calculator. The Foodborne Illness Cost Calculator provides information on the assumptions behind foodborne illness cost estimates, and gives users the opportunity to make their own assumptions and to calculate their own cost estimates.  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 policy makers rank risks, prioritize spending, and formulate food safety policies. 

Food Assistance and Nutrition Research Program, Final Report: Fiscal 2010 Activities.  This report summarizes ERS's Food Assistance and Nutrition Research Program (FANRP) activities and accomplishments in fiscal 2010, including newly awarded projects and recent publications.  FANRP supports intramural and extramural research on a wide range of policy-relevant food assistance and nutrition topics.  The three perennial program themes are (1) Program Outcomes and Economic Well-Being of Participants, (2) Program Access and Economic Determinants of Participation, and (3) Program Dynamics and Efficiency.  The core food and nutrition assistance programs include the Supplemental Nutrition Assistance Program (SNAP),the child nutrition programs, and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).

Consumer Data and Information Program (CDIP).  ERS continued development of a consumer data infrastructure needed for analyses of food policy issues. Particularly important was the continued progress on the FoodAPS survey.  The pilot study conducted in 2011 provided insights into ways in which ERS can improve the final survey, which is planned for 2012.  Additional CDIP efforts include improving ERS's Food Availability Data System, 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 NHNAES more readily available to researchers, and helped re-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-Homescan data on packaged and random weight food purchases and also purchased a UPC database with detailed nutritional information.  

Quarterly Food-at-Home Price Database.  The Quarterly Food-at-Home Price Database (QFAHPD) was developed to provide market-level food prices that can be used to study how prices affect food choices, intake, and health outcomes. The database, constructed from 1999-2006 Nielsen-Homescan data, includes quarterly observations on the mean price of 52 food categories for 35 market groups covering the contiguous United States. Data from 2006 indicate that cross-market price variation can be as much as three to four times greater than annual food price inflation.

Food Availability (Per Capita) Data System.  The ERS food availability (per capita) data system includes three distinct but related data series.  The data serve as popular proxies for actual consumption.  The food availability data are now available through 2009 at the national level, most commodities have annual data extending back to 1909.  This data series provides estimates, for example, of the pounds of beef available for domestic consumption per capita per year.  Also included are data on nutrient availability in the food supply and on loss-adjusted food availability.  This data series provides estimates, for example, of the calories of beef available for domestic consumption per capita per day. 

Food Safety Audits, Plant Characteristics and Food Safety Technology Use in Meat and Poultry Plants. This report documents the extent of food safety audits in U.S. meat and poultry processing plants and examines the association between the use of audits and plant size, firm structure, and food safety technology use.  The authors of this report found that more than 90 percent of output in the poultry slaughter, cattle slaughter, and ready-to-eat products (e.g., luncheon meats) industries is from audited plants and more than 70 percent of output in the hog slaughter, ground beef, and not-ready-to-eat products (e.g., meat cuts) industries is from audited plants.  The report also finds that larger plants, plants subject to food safety audits, and plants that are part of a multiplant firm use more food safety technology than other plants, and plants subject to both plant-hired and customer-hired audits had greater technology use than single (plant- or customer-hired) audit plants.

Last updated: Tuesday, June 19, 2012

For more information contact: Steve Crutchfield