Ag and Food Sectors and the Economy
The U.S. agriculture sector extends beyond the farm business to include a range of farm-related industries. The largest of these are food service and food manufacturing. Americans' expenditures on food amount to 13 percent of household budgets on average. Among Federal Government outlays on farm and food programs, nutrition assistance far outpaces other programs.
Agriculture, food, and related industries contributed $992 billion to U.S. gross domestic product (GDP) in 2015, a 5.5-percent share. The output of America’s farms contributed $136.7 billion of this sum—about 1 percent of GDP. The overall contribution of the agriculture sector to GDP is larger than this because sectors related to agriculture—forestry, fishing, and related activities; food, beverages, and tobacco products; textiles, apparel, and leather products; food and beverage stores; and food service, eating and drinking places—rely on agricultural inputs in order to contribute added value to the economy.
With a 12.6-percent share, food ranked third behind housing (33 percent) and transportation (15.8 percent) in a typical American household's 2016 expenditures. Expenditure shares for housing, food, personal insurance and pensions, healthcare, and savings rose slightly in 2016, while transportation, entertainment and alcoholic beverage, and apparel expenditure shares fell from 2015 to 2016.
In 2015, the U.S. food and beverage manufacturing sector employed more than 1.5 million people, or just over 1 percent of all U.S. nonfarm employment. In over 34,000 food and beverage manufacturing plants located throughout the country, these employees were engaged in transforming raw agricultural materials into products for intermediate or final consumption. Meat and poultry plants employed the largest percentage of food and beverage manufacturing workers, followed by bakeries, and fruit and vegetable processing plants.
USDA outlays increased by 48 percent from fiscal 2006 to fiscal 2015 (fiscal years begin October 1 and end September 30), with the largest increase coming from food and nutrition assistance programs, which grew especially fast since fiscal 2008, reflecting higher recession-related participation and a temporary increase in per-person benefits from the Supplemental Nutrition Assistance Program (SNAP). An improving economy and expiration of the larger SNAP benefits caused growth of food and nutrition assistance program outlays to slow by fiscal 2012 and decrease in fiscal 2014. Outlays on Federal crop insurance also decreased in fiscal 2014 as extreme weather events subsided and crop prices declined. Commodity program outlays declined in fiscal 2015 with the passing of the new Farm Act in 2014. Food and nutrition assistance accounted for more than 73 percent of USDA outlays in fiscal 2015.