Publications

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  • Globalization of the Processed Foods Market

    AER-742, April 02, 1997

    International commerce in processed foods substantially exceeds the value of unprocessed agricultural commodities and is expanding more rapidly. International trade in processed foods has been the most rapidly growing portion of world food and agricultural trade during the past decade. Even more significant, however, are sales from foreign affiliates of food manufacturing, grocery wholesaling and retailing, and food service firms. Foreign affiliation is acquired through foreign direct investment in foreign plants and facilities. U.S. food manufacturers' sales through foreign affiliates were more than quadruple the value of processed food exports from the United States. Foreign food manufacturers' sales through U.S. affiliates were more than double the value of processed food exports to the United States. Patterns of global commerce in processed foods are influenced by public policies addressing transportation, communication, rules for regional and multinational trade, food product and process standards, the environment, and intellectual property.

  • The Food Marketing System in 1995

    AIB-731, April 15, 1997

    The number of new food processing plants rose sharply in 1995. Profitability from food manufacturing and retailing operations (excluding interest expense) continued to increase, reflecting strong sales, wage and producer price stability, and streamlining of operations. The number of mergers and leveraged buyouts fell. New product introductions, consumer advertising expenditures, common stock prices and the positive U.S. balance of trade in processed food reached new highs. This report analyzes and assesses yearly developments in growth, conduct, performance, and structure of the institutions--food processors, wholesalers, retailers, and foodservice firms--that comprise the Nation's food marketing system. Industry growth includes changes in sales for each of the four sectors, product mix, and external economic factors affecting the food system. Conduct measures firms' competitive behavior, which includes such price and nonprice competition as advertising, promotion, new product introduction, new store formats, price discounting, and menu variety. Performance includes profitability, capital expansion, foreign trade and investment, research and development, capacity use, equity market changes, and productivity. Structure developments include mergers, acquisitions, divestitures and leveraged buyouts, and changes in the number of companies and establishments.

  • U.S. Foreign Direct Investment in the Western Hemisphere Processed Food Industry

    AER-760, March 01, 1998

    Foreign direct investment (FDI) has become the leading means for U.S. processed food companies to participate in international markets. Affiliates of U.S.-owned food processing companies had $30 billion in sales throughout the Western Hemisphere in 1995, nearly 4 times the level of processed food exports. This report puts U.S. foreign direct investment and trade in processed foods to the region into global perspective, and finds evidence that, in the aggregate for the 1990's, trade and FDI are complementary--not competitive--means of accessing international food markets. Incomes have grown sufficiently in most countries to support growth in affiliate sales and U.S. exports, indicating a strong demand for a wide variety of processed foods.

  • The Food Marketing System in 1996

    AIB-743, August 03, 1998

    New food product introductions fell sharply in 1996. The number of new plants, consumer advertising expenditures, and common stock prices reached new highs in 1996, as did the number of mergers in the foodservice industry. Profitability from food manufacturing and retailing was higher due to strong sales, wage and producer price stability, and streamlining of operations.

  • Food Cost Indexes for Low-Income Households and the General Population

    TB-1872, February 01, 1999

    The results of this study indicate that the Consumer Price Index (CPI) has not systematically overestimated or underestimated the food costs incurred by the general population. True-cost-of-food indexes calculated for the general population tend to be the same as or slightly lower then the CPI except for 1994 and 1995. The true-cost indexes also indicate that there are economies to household size, that black households incur lower costs than nonblack households, and that the households in the West tend to have the highest costs. True-cost indexes for low-income households tend to be about the same as the CPI for one-person households, and lower than the CPI for two- and four-person households in all years. This is a significant finding in that components of the CPI for food at home are indirectly used to adjust benefit levels for food stamp recipients.

  • Structural Change and Competition in Seven U.S. Food Markets

    TB-1881, February 01, 2000

    Recent trends in mergers and acquisitions in the U.S. food sector--food manufacturers, wholesalers, and retailers--raise concerns about market power. In the presence of market power, farmers may receive lower than competitive farm prices, and consumers may pay higher than competitive retail prices. This study presents empirical tests of market power at the national level for seven food categories: beef, pork, poultry, eggs, dairy, fresh fruit, and fresh vegetables. At the national level, our tests provide evidence of competitive conduct in both the sale of final food products and the purchase of farm ingredients.

  • The U.S. Food Marketing System, 2002

    AER-811, August 01, 2002

    The U.S. Food Marketing System, 2002 provides a detailed overview of the structure, performance, information systems, new technology, and foreign direct investment of the food manufacturing, wholesaling, grocery retailing, and food service sectors, including a comprehensive set of appendix tables containing sales, concentration, trade, productivity, and other indicators.

  • From Supply Push to Demand Pull: Agribusiness Strategies for Today's Consumers

    Amber Waves, November 01, 2003

    Changing U.S. demographics—more mature consumers, greater ethnic diversity, and larger incomes—are driving changes in consumer demand for food products. These changing preferences, along with technological advances and other changes in the economy, offer agribusiness companies new challenges and opportunities.

  • Food Manufacturing Productivity and Its Economic Implications

    TB-1905, November 07, 2003

    The gross-output multifactor productivity index for U.S. food manufacturing grew 0.19 percent per year between 1975 and 1997. This productivity growth is low when compared with an estimate of 1.25 percent per year for the whole manufacturing sector. Low investment in research and development (R&D) could be one reason. Although productivity has been relatively low, food manufacturing output has grown significantly at 1.88 percent over the last two decades. Indeed, the expansion of combined factor inputs provided significant impetus to food manufacturing output. Food manufacturing is materials-intensive, and declining real producer prices of crude food and feedstuffs fueled the expansion of input utilization and drove down prices of processed foods paid by consumers.

  • Contracts, Markets, and Prices: Organizing the Production and Use of Agricultural Commodities

    AER-837, November 01, 2004

    Demand for specific product attributes is making contracts the choice over traditional spot markets for many livestock commodities and some major crops-e.g., sugar beets, fruit, tomatoes.

  • Interstate Variation in WIC Food Package Costs: The Role of Food Prices, Caseload Composition, and Cost-Containment Practices

    FANRR-41, January 11, 2005

    Food prices within States affect average monthly costs of State food benefits packages provided by the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) more than variations in WIC caseload composition do. In addition, cost-containment practices by State WIC agencies provide different levels of cost savings in different areas, which also contributes to interstate variation in benefits package costs. This study is one of the few to examine the degree to which food prices, caseloads, and cost-containment practices influence costs of State WIC food benefits packages. Because few data exist on the actual food items that WIC participants purchase, the study used a scanner dataset of supermarket transactions and other sources to estimate the average monthly cost of WIC food benefits in several areas.

  • Companies Continue To Offer New Foods Targeted to Children

    Amber Waves, June 01, 2005

    Between 2000 and 2004, whole-grain, low-fat, and low-sugar products targeted to children accounted for 15 percent of all new children's foods and beverages. Despite the gains made in introducing more healthful foods, candy still accounted for 46 percent of new children's food products introduced during the period.

  • How Americans Quench Their Thirsts

    Amber Waves, September 01, 2005

    Lower income households buy more powdered soft drinks and tea, and less milk and fruit juices, than higher income households. Both income groups purchase similar amounts of fruit drinks and carbonated soft drinks. Across both groups, at-home beverage purchases provided 10 percent of daily calories and about 20 percent and 70 percent of the recommended daily intakes of calcium and vitamin C, respectively.

  • Where You Shop Matters: Store Formats Drive Variation in Retail Food Prices

    Amber Waves, November 01, 2005

    Just 20 years ago, traditional grocery stores claimed nearly 90 percent of Americans' at-home food purchases. Today, their share has dropped to 69 percent. Led by retail giants Wal-Mart, Costco, and Target, nontraditional food stores have managed to grab market share by enticing consumers with a formula of one-stop shopping and lower prices.

  • Current Activities

    Amber Waves, February 01, 2006

    Previews of research in the works at ERS - February 2006

  • New Releases

    Amber Waves, February 01, 2006

    Highlights of new publications from ERS - February 2006

  • China's Rising Fruit and Vegetable Exports Challenge U.S. Industries

    FTS-32001, February 14, 2006

    China has raised its profile in global fruit and vegetable markets, with the value of its exports during 2002-04 more than double the value from a decade earlier. Most of China's exports are processed fruits and vegetables that do not yet pose a serious challenge to U.S. exports. However, China's fresh vegetable sales to Japan and other Asian markets compete directly with U.S. products. In addition, the United States has been the largest market for China's apple juice exports. Over time, China's growing domestic market may absorb more of its production. Moreover, China faces stiff challenges in improving the quality and safety of its products, upgrading its marketing and distribution infrastructure, and reducing marketing costs.

  • Do Food Industry Mergers and Acquisitions Affect Wages and Employment?

    Amber Waves, June 01, 2006

    ERS and Census Bureau researchers used statistical techniques to isolate the effects of mergers and acquisitions on wages and employment in nine food industries. Their research found that mergers and acquisitions were no more likely to lead to job cuts than other causes of restructuring. Mergers and acquisitions had a positive, but small, effect on wages in seven of the industries in the first study period, but no discernible effect in the second study period.

  • Despite Katrina, Overall Food Prices Stable

    Amber Waves, September 01, 2006

    In the year following Hurricane Katrina, overall food prices in the South region rose 1.8 percent, slightly higher than in the West and Midwest, but below the 2.9-percent increase in the Northeast. Hurricane Katrina's destruction in the Gulf Coast areas was one of the factors contributing to higher banana, sugar, and rice prices between August 2005 and June 2006.

  • The Impact of Big-Box Stores on Retail Food Prices and the Consumer Price Index

    ERR-33, December 29, 2006

    This report focuses on retail food market dynamics and how they affect food price variation across store formats. The differences in prices across store formats are especially noteworthy when compared with standard measures of food price inflation over time. Over the past 20 years, annual food price changes, as measured by the CPI, have averaged just 3 percent per year, while food prices for similar products can vary by more than 10 percent across store formats at any one point in time. Since the current CPI for food does not fully take into account the lower price option of nontraditional retailers, a gap exists between price changes as measured using scanner data versus the CPI estimate, even for the relatively low food inflation period of 1998-2003. This study estimates that the CPI for dairy products overstates food price change by 0.5 to 2.5 percentage points per year for dairy, eggs, and butter/margarine.