ERS Charts of Note

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Productivity growth is the major source of growth in U.S. agricultural output

Wednesday, February 19, 2020

Technological developments in agriculture have been influential in driving changes in the farm sector. Innovations in animal and crop genetics, chemicals, equipment, and farm organization have enabled continuing output growth without adding much to inputs (including land, labor, machinery, and intermediate goods). As a result, even as the amount of land and labor used in farming declined, total farm output nearly tripled between 1948 and 2017. During this period, agricultural output grew at an average annual rate of 1.53 percent, compared to 0.07 percent for total farm inputs. Output growth was largely driven by the growth in agricultural productivity, as measured by total factor productivity (TFP)—the difference between the growth of aggregate output and growth of aggregate inputs. Between 1948 and 2017, TFP grew at an average annual rate of 1.46 percent. In the short term, TFP estimates can fluctuate from time to time—reflecting transitive events, such as bad weather or oil shocks—but it usually recovers and returns to its long-term trend growth, as has happened in recent years. This chart appears in the ERS data product, Agricultural Productivity in the U.S., updated January 2020.

USDA agencies funded $287.7 million towards 213 research projects on automation or mechanization in specialty crops, 2008-2018

Friday, February 14, 2020

At $64.7 billion, specialty crops comprised one-third of U.S. crop receipts and one-sixth of receipts for all agricultural products in 2017. Many specialty crops are labor-intensive in production, harvesting, or processing. For example, harvest often requires workers to accurately distinguish ripe and unripe fruits and vegetables and gently pick, sort, or package the fruit or vegetable by hand without damage. A long-term decline in the supply of farm labor in the U.S. has encouraged producers to select less labor-intensive crops, invest in labor-saving technologies, and develop strategies to increase labor productivity. A number of USDA programs support the development and use of automation or mechanization in the production and processing of U.S. specialty crops. From 2008-2018 these programs in the Agricultural Marketing Service (AMS), the Agricultural Research Service (ARS), and the National Institute of Food and Agriculture (NIFA) funded $287.7 million toward 213 projects to develop and enhance the use of automation or mechanization in specialty crop production and processing. Projects covered a broad spectrum of technologies, including job aid and machinery automation; machine learning and data analysis; mechanical harvesting and processing; precision agriculture; remote sensing and drones; and sensors. Each of the USDA programs are designed differently to achieve unique objectives, although each program addresses the development and use of automation or mechanization in specialty crops in some form. The data in this chart are available in the February 2020 ERS report, Developing Automation and Mechanization for Specialty Crops: A Review of U.S. Department of Agriculture Programs.

U.S. per capita consumption of total meat was up in 2017

Wednesday, February 12, 2020

In 2017, the per capita supply of red meat, poultry, and fish and shellfish available for Americans to eat, after adjusting for some of the spoilage, plate waste, and other losses in grocery stores, restaurants, and homes, rose to 143.9 pounds, continuing an upward trend that began in 2014 after an earlier decline. The 7.8-percent rise from 2014’s total was largely driven by increases in loss-adjusted availability of beef and chicken. Over 2015-17, beef had the largest percentage increase in per capita loss-adjusted availability—growing by 6 percent. Recovering consumer incomes after the 2007-09 recession and stable or declining retail prices have increased U.S. consumers’ demand for red meat in recent years. For chicken, the recent increase continues an upward trend that saw loss-adjusted availability of chicken more than doubling from 22.4 pounds per capita in 1970 to 52.3 pounds per capita in 2017. Efficiencies in chicken production have expanded supplies and kept prices in check. This chart appears in “U.S. Per Capita Availability of Red Meat, Poultry, and Seafood on the Rise” in ERS’s December 2019 Amber Waves.

Production contracts dominate hog and poultry production, while marketing contracts are more widely used in crops and dairy

Monday, February 10, 2020

Contracts are widely used in the production and sale of U.S agricultural commodities. Under marketing contracts, ownership of the commodity remains with the farmer during production, with little involvement from the contractor. By comparison, under a production contract, the contractor usually owns the commodity (e.g., the chicks for poultry operations) during production and often provides specific inputs and services, production guidelines, and technical advice to the grower—who receives a contract fee for raising the commodity. Across all commodities, the value of contract production was nearly evenly split between marketing and production contracts in 2018. However, the use of contract types varies sharply across commodities. Most contract crop production (except for seeds and some processing vegetables) used marketing contracts, as did all contract dairy production. In contrast, production contracts were used extensively for the production of hogs and poultry. Some hogs may be raised under a production contract between a grower and an integrator (an intermediary that coordinates production), and then sold by the integrator under a marketing contract with a processor, who slaughters and processes the animal for sale. This chart updates data found in the July 2019 Amber Waves article, “Marketing and Production Contracts Are Widely Used in U.S. Agriculture.”

Food-insecure households purchase less fruit than food-secure households

Friday, February 7, 2020

ERS researchers used data from USDA’s National Household Food Acquisition and Purchase Survey (FoodAPS) to examine purchases of fruit from supermarkets, supercenters, convenience stores, and other retailers (food-at-home purchases) by two groups of low-income households: food-secure and food-insecure households. Food-secure households have consistent, dependable access to enough food for active, healthy living; food-insecure households do not. The researchers looked at total fruit purchases (whole and juices) and whole fruit purchases. They converted household purchases to “per adult equivalents,” where household members are scaled by daily calorie requirements based on their age and sex using 2,000 calories as an adult equivalent. The conversion accounts for differences in household size and composition. The researchers found that low-income food-secure households purchased 7.1 cup equivalents of fruit per adult equivalent per week, versus the 3.6 cups purchased by low-income food insecure households. In terms of whole fruit, food-insecure households purchased just under 2 cup equivalents per adult equivalent per week, while food-secure households purchased 4 cups per adult equivalent. This chart appears in the August 2019 ERS report, Food Security and Food Purchase Quality Among Low-Income Households: Findings From the National Household Food Acquisition and Purchase Survey (FoodAPS).

Forecast for farm sector profits in 2020 near average levels since 2000

Wednesday, February 5, 2020

U.S. net cash farm income—gross cash income less cash expenses—when adjusted for inflation is forecast to decrease $13.1 billion (10.7 percent) to $109.6 billion in 2020. U.S. net farm income—a broader measure of farm sector profitability that incorporates noncash items including economic depreciation and gross imputed rental income—is forecast to increase $1.4 billion (1.4 percent) from 2019 to $96.7 billion in 2020. If forecast changes are realized, net cash farm income in 2020 would be 0.6 percent below its inflation-adjusted average calculated over the 2000-18 period, while net farm income would be 5.4 percent above its 2000-18 average. The trajectories of the two income measures diverge in 2020 largely because of how net sales from inventories are treated. Net cash farm income records income in the year the sale took place, while net farm income counts it in the year the production occurred. High net sales ($14.9 billion) from crop inventories forecast in 2019 are expected to boost net cash farm income significantly that year. Very low net sales from inventories ($0.5 billion) in 2020 are expected to contribute to a decrease in net cash farm income between the two years. In the net farm income series, net inventory changes are removed from cash receipts and track more closely with the value of annual agricultural production. Find additional information and analysis on the ERS Farm Sector Income and Finances topic page, reflecting data released February 5, 2020.

Volatility in market prices for fruit and vegetables helps drive food loss during production and distribution

Monday, February 3, 2020

The U.S. Department of Agriculture (USDA) estimates that annually, over $161 billion of food at the retail and consumer stage of the supply chain goes uneaten. Food loss also occurs on farms and in the pre-retail distribution channels—the Food and Agricultural Organization estimated 30 percent of losses in fruits and vegetables occur in these earlier stages. USDA’s Economic Research Service (ERS) recently examined the substantial role that expected costs, revenues, and risks play in food loss at the pre-retail level. Factors influencing food loss include price volatility: for example, vegetables have exhibited a relative variation in price more than 20 times that of grains used for feed. When prices fall below the cost of production, it becomes unprofitable for growers to advance produce through the supply chain. Alternatively, when prices rise, growers harvest more intensively, and may have the incentive to send lower-cosmetic-quality product to market, which can then be subject to increased loss further down the supply chain. Other economic factors that influence the level of food loss include labor cost and availability, availability of cold-chain infrastructure, aesthetic standards, consumer preferences, contract requirements, and policies related to the harvest and marketing of fresh produce. This chart appears in the recent ERS report, Economic Drivers of Food Loss at the Farm and Pre-Retail Sectors: A Look at the Produce Supply Chain in the United States.

About a third of beginning farms and half of established farms produced at least $10,000 worth of output between 2013 and 2017

Friday, January 31, 2020

From 2013 to 2017, there were an average of 898,100 operators with no more than 10 years of farming experience. Of these beginning farmers, a little more than half (461,400) were operators of beginning farms, or those farms on which all the operators were beginning farmers. Overall, there were an average of 339,400 beginning farms and 1,691,400 established farms between 2013 and 2017. About a third of beginning farms and half of established farms produced at least $10,000 worth of output. Beginning farms (67 percent) were also more likely than established farms (52 percent) to be very small, generating less than $10,000 worth of output. Although the majority of beginning and established farms were very small, these operations contributed a relatively low share of production—accounting for about 2 percent of output from all beginning farms and 1 percent from all established farms. This chart appears in the ERS report, An Overview of Beginning Farms and Farmers, released September 2019.

Throughout most of the day, more women prepared food than did men in 2014-2017

Wednesday, January 29, 2020

ERS researchers used data for 2014-17 from the Bureau of Labor Statistics’ annual American Time Use Survey (ATUS) to determine when Americans engage in food preparation and to look at gender differences. Over an average day in 2014-17, 54 percent of people age 15 and older engaged in food preparation with a noticeable gender disparity: 65 percent of women prepared food on an average day, compared to 41 percent of men. Counting only those Americans who prepared food on the day recorded in the survey, an average of 51 minutes per day were devoted to the activity, and women devoted more time than men (57 minutes versus 42 minutes). The peak times for food preparation were at 7 to 7:59 a.m. (14 percent), followed by a smaller peak at noon to 12:59 p.m. (12 percent) and a much larger peak at 5 to 5:59 p.m. (28 percent). More women than men engaged in food preparation from 7 a.m. to 6:59 p.m. A version of this chart appears in the ERS report, Food-Related Time Use: Changes and Demographic Differences, November 2019.

While Chinese imports are down, global cotton trade is projected at a 7-Year High in 2019

Monday, January 27, 2020

For 2019, increased imports are expected in many non-cotton-producing countries, as well as some producing ones. Although China—a major producer—is projected as the leading importer in 2019, its upcoming imports are expected to be below those from a year ago, as cotton mill use in China is forecast to decline for the second consecutive year. In contrast, all other major importers are anticipated to secure additional imports this year. For Bangladesh and Vietnam, higher cotton imports are seen as supporting the recent textile and apparel industry expansion. At the same time, a 3-decade-low production forecast for Pakistan in 2019 is expected to result in record-high cotton imports to help sustain its spinning industry. Meanwhile, higher imports are also forecast for Turkey and others in 2019. In fact, global cotton imports are forecast by the U.S. Department of Agriculture to rise for the fourth consecutive year in 2019 to 43.8 million bales, nearly 4 percent (1.6 million bales) above last year’s volume. The growing trend is significant for the United States, as more than 80 percent of U.S. cotton production is exported to numerous countries around the world, with the U.S. share of 2019 global trade forecast at 38 percent. The 2019 global import forecast would be its highest since 2012’s record of 47.6 million bales. This chart is based on data in the ERS Cotton and Wool Outlook Tables, released in January 2020.

Food-insecure households spend less on food and acquire fewer calories than food-secure households

Friday, January 24, 2020

Household food insecurity—a lack of access to enough food for all household members to have healthy, active lives—is strongly correlated with a variety of costly, chronic illnesses and conditions in both adults and children. In a recent report, ERS researchers used data collected in USDA’s National Household Food Acquisition and Purchase Survey (FoodAPS) to examine differences in spending on and calories acquired from food at home (food from large and small grocery stores, specialty stores, and food pantries) by two groups of low-income households—food-secure and food-insecure households. The researchers converted household spending and acquired calories to “per adult equivalents”, where household members are scaled by daily calorie requirements based on their age and sex using 2,000 calories as an adult equivalent. The conversion accounts for differences in household size and composition. The researchers found that low-income food-insecure households spent almost $13 less per adult equivalent per week on food at home, and they acquired 5,170 fewer calories per adult equivalent per week from purchased and free at-home foods than low-income food-secure households. Spending on and calories acquired from eating out places were similar for the two low-income groups. This chart appears in “Food-Insecure Households Spend Less and Acquire Less Food Per Week Than Food-Secure Households” in the October 2019 issue of ERS’s Amber Waves magazine.

New Brazil wheat tariff rate quota expands marketing opportunities for the U.S. and other non-Mercosur exporters

Wednesday, January 22, 2020

Brazil is the third-largest global importer of wheat. However, in recent years just one to six percent of U.S. exports have gone to this important South American market on average. In the past ten years, the bulk of Brazil’s wheat imports have originated from Mercosur trading partners (Argentina, Paraguay, and Uruguay) on which Brazil does not impose import duties. Mercosur partner Argentina enjoys proximity benefits and typically supplies about 65 percent of Brazil’s total volume of imports. During periods when Argentina’s exportable wheat supplies have been limited, such as 2013/14, Brazil has removed duties on wheat from non-Mercosur countries, increasing the competitiveness of their exports. As a result, in the 2013/14 trade year (July/June), the U.S. accounted for more than 50 percent of Brazil’s wheat imports. The U.S. has historically been the dominant non-Mercosur wheat exporter to Brazil and is noted for the high quality of its wheat. On November 14, 2019, the Government of Brazil removed a 10-percent duty that applied to the first 750,000 metric tons of wheat imports from non-Mercosur countries. This suggests the U.S. will be increasingly—though mainly seasonally—price competitive with Mercosur-origin wheat. This chart appears and is explained in more detail in the article, “Brazil’s Implementation of a TRQ (tariff rate quota) for Wheat Cracks Open the Door for Expanded U.S. Exports,” in the December 2019 issue of ERS’s Wheat Outlook newsletter.

Business & Industry (B&I) Guaranteed Loans reduced risk of rural business failure

Tuesday, January 21, 2020

USDA’s Business and Industry (B&I) Guaranteed Loan Program guarantees loans to businesses in rural areas in partnership with private-sector lenders. By reducing lenders’ risk, the program encourages lenders to provide more generous terms or larger principal amounts, or to approve loans to rural businesses that they otherwise might not make. ERS researchers estimated business survival rates between 1990 and 2013 for B&I loan recipients and a comparison group of non-recipients similar to loan recipients. On average, 2 years after receiving a B&I loan, recipients were 90 percent less likely to fail in the next year than the group of similar non-recipients. The effect of B&I loans on survival rates declined with time. Nevertheless, 4 years after receiving a B&I loan, recipients were still 79 percent less likely to fail in the next year than similar non-recipients. And 6 years after receiving a B&I loan, recipients were 72 percent less likely to fail in the next year than similar non-recipients. The B&I Loan Program’s strong effects on business survival suggest that the program has helped retain existing jobs in local communities. This chart appears in the September 2019 Amber Waves finding, “Rural Businesses That Receive USDA Business and Industry Guaranteed Loans Less Likely To Fail.”

Palm oil rally sparked by growing biodiesel use in Malaysia and Indonesia

Friday, January 17, 2020

Palm oil is the world’s most widely consumed vegetable oil, used for a multitude of edible goods as well as for industrial applications, including biodiesel. Production of palm oil is dominated by the two top producers—Indonesia and Malaysia. Rising consumption of palm oil by major producing countries and falling output of vegetable oil by major importers, including India, China, and the European Union, have led to recent price increases for Malaysian palm oil. By October 2019, Malaysian prices had climbed to a 13-month high, and further price strengthening is possible next year. In addition to increased demand, palm oil supply and stocks are projected lower due to slowing production. For Malaysia, USDA lowered its estimate of palm oil production for October 2019 through September 2020 to 21 million metric tons. The reduction can be tied to Malaysian rainfall over the last 12 months being significantly below average, which can adversely affect palm oil yields for up to a year. A slower rise in palm oil output coincided with decisions by the Indonesian and Malaysian governments to increase the percentage that biodiesel must comprise in the total fuels supply. Starting in 2020, Malaysia will double its biodiesel requirement to 20 percent. This chart appears in the ERS Oil Crops Outlook newsletter released in November 2019.

Veterans consume a higher share of calories from added sugars and solid fats than nonveterans

Wednesday, January 15, 2020

In a recent study, ERS researchers used self-reported food intake data to explore how veterans’ diets compare with those of nonveterans. The researchers found that, much like other Americans, veterans do not closely follow healthy eating recommendations in the Dietary Guidelines for Americans, jointly issued every 5 years by USDA and the Department of Health and Human Services. Veterans were found to have somewhat lower quality diets than nonveterans after controlling for demographic differences, such as the fact that veterans tend to be older and are more often male. Veterans’ lower diet quality was primarily due to their higher consumption of calories from added sugars and solid fats. Between 2003 and 2016, added sugars represented 16.4 percent of total calories for veterans, on average, versus 13.8 percent for demographically similar nonveterans. Added sugars include cane and beet sugar, syrups, and other caloric sweeteners. The Dietary Guidelines encourages individuals to keep calories from added sugars below 10 percent of total calories. Veterans obtained another 18.1 percent of their total calories from solid fats, as compared with 15.6 percent for nonveterans. Solid fats are the fats found in meats, poultry, dairy products, hydrogenated vegetable oils, and some tropical oils. The data for this chart come from the ERS report, An Examination of Veterans’ Diet Quality, December 2019.

The fate of expiring Conservation Reserve Program acreage varied with its conservation practice

Monday, January 13, 2020

ERS researchers tracked the fate of 7.6 million acres of Conservation Reserve Program (CRP) land in contracts that expired between 2013 and 2016. About 36 percent of expiring land (2.76 million acres) reenrolled into the CRP. Of the about 4.89 million acres that exited the program (i.e. were not reenrolled), nearly 80 percent of the land was put into some type of crop production—with the remainder going into grass, tree, and other non-agricultural covers. CRP land associated with tree practices was the most likely to be reenrolled in the program, at a rate of 47 percent, compared with 35 percent of land in grass practices and 29 percent of land in wildlife practices. Of land that did not reenroll, 77 percent of land in a tree practice retained a tree cover, and only 13 percent went to annual crop production. In contrast, 65 percent of land in a wetland practice and 59 percent of land in a grass practice went to annual crop production. This chart appears in the January 2020 ERS report, The Fate of Land in Expiring Conservation Reserve Program Contracts, 2013-2016.

As income increases, the share of income spent on food falls

Friday, December 20, 2019

As their incomes rise, households spend more money on food, but it represents a smaller share of their overall budgets. In 2018, households in the lowest income quintile, with an average 2018 after-tax income of $11,695, spent an average of $4,109 on food (about $79 a week). Households in the highest income quintile spent an average of $13,348 on food (about $257 a week). The three-fold increase in spending between the lowest and highest income quintiles is not the result of a three-fold increase in consumption. Rather, people choose to buy different types of food as they gain more disposable income. One example is dining out. One-third of food spending by the lowest income quintile goes to food away from home, whereas food away from home accounts for half of total food spending for the top quintile. Even with a shift to more expensive food options, as income increases, the percent of income spent on food goes down. In 2018, food spending represented 35.1 percent of the bottom quintile’s income, 13.6 percent of income for the middle quintile, and 8.2 percent of income for the top quintile. This chart appears in the Food Prices and Spending section of ERS’s Ag and Food Statistics: Charting the Essentials data product.

ICYMI... Family farm households rely on various sources of income

Thursday, December 19, 2019

The composition of family farm household income varies by the type of farm. For example, households operating commercial family farms earned most of their income on the farm ($225,264 on average in 2017). Residence family farm households relied mostly on off-farm wages and salaries ($69,493 on average). Intermediate family farm households, meanwhile, had relatively high retirement and disability income ($19,222 on average), in part because these households had the oldest principal operators on average. Less than half of all farm households had positive incomes from their farm operations in 2017. Among commercial farm households, 86 percent had positive income from farming, compared to 51 percent of intermediate farm households and 35 percent of residence farm households. At the median, U.S. farm households earned $67,500 from non-farm sources, compared to a median loss of $800 from farming operations. This chart appears in the Amber Waves infographic “Farm Households Rely on Many Sources of Income,” published June 2019. This Chart of Note was originally published June 14, 2019.

U.S. apple crop estimate up

Wednesday, December 18, 2019

With the onset of cold weather the U.S. apple harvest for the 2019/20 marketing year (August-July) is wrapping up. The 2019/20 U.S. apple crop is forecast at 10.6 billion pounds, up 4 percent from a year ago as output gains in Western States (largely Washington and California) outweigh declines in Eastern States. The top apple State, Washington, expects a 7.2-billion pound crop of excellent quality, up 7 percent from last year. While this increase signals higher fresh-market supplies, flat-to-slightly-smaller crops in Michigan, New York, and Virginia may hinder gains in processed production. Overall, larger production indicates a possible downward pressure on apple-grower prices during the 2019/20 season-relative to 2018/19, likely boosting overall demand, especially in the fresh market. Pricing early in 2019/20, however, was supported by relatively strong late-2018/19 fresh apple grower prices due to tighter supplies. This chart is based on the ERS Fruit and Tree Nut Outlook newsletter, released September 2019.

ICYMI... SNAP participation continued to contract in 2018

Tuesday, December 17, 2019

The Supplemental Nutrition Assistance Program (SNAP) is the cornerstone of USDA’s food and nutrition assistance programs, accounting for 68 percent of all Federal food and nutrition assistance spending in fiscal 2018. An average of 40.3 million people per month participated in the program in fiscal 2018, 4 percent fewer than in fiscal 2017. As the fifth consecutive year of declining participation, fiscal 2018’s caseload was 15 percent less than the historical high average of 47.6 million participants per month in fiscal 2013. The decrease in SNAP participation in 2018 was likely associated with the country’s continued economic improvement in recent years. Federal spending for SNAP fell by 5 percent in fiscal 2018 to $65.0 billion—19 percent less than the historical high of $79.9 billion set in fiscal 2013. This chart appears in the ERS report, The Food Assistance Landscape: FY 2018 Annual Report, released on April 18, 2019. This Chart of Note was originally published May 7, 2019.

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