Family food patterns have changed: Why that is likely bad news for farmers

Researchers at Virginia Tech are studying the effects of changing food spending patterns and the impact on farmers and the food supply chain as a whole.

Households spend more money on food outside the home than what is spent eating at home. However, the farmers’ share of the food dollar eaten outside the home has declined while the share of food eaten at home has increased. The study is being done with a a $550,000 grant from the National Institute of Food and Agriculture by Virginia Tech researchers George Davis and Anubhab Gupta, in the Department of Agricultural and Applied Economics.

“Our project aims to look at the changing profitability and welfare effects in the food supply chain while recognizing that the effects will depend on the underlying market structure and consumer socioeconomic, demographic, and environmental factors,” said Davis.

The research team has four objectives:

Look at how the difference between retail food prices and farm prices have changed over time as spending on food at home and food away from home has changed

Determine to what extent consumers have benefitted from the change in eating food at home versus food away from home.

Consider what role the degree of competition within the food supply chain has affected profitability and welfare for the farmer, processors, and consumers as food spending patterns have changed.

Consider how alternative policies affecting food at home and food away from home spending will affect profitability and welfare throughout the food supply chain.

To achieve the objectives, the team will utilize public-use consumer expenditure survey microdata from the Bureau of Labor Statistics, NBER-CES Manufacturing Industry Database and estimates from the literature.

“Our integrated framework will answer important policy and scenario questions related to socioeconomic and demographic profile of consumers, COVID-19, Ukraine war, etc. on welfare distribution throughout the food supply chain, while extending our knowledge on the four strands of literature and a unique way of integrating them,” Davis said.