When consumers dine out more, farmers see less of their food dollars

moneyAmericans are spending more on food, and they’re dining out more. One consequence of that, other than leftovers for tomorrow’s lunch, is that farmers are seeing less of each consumer food dollar.

In September, the U.S. Department of Agriculture’s Economic Research Service reported U.S. consumers spent a record $1.62 trillion on food and beverages in 2017. Nearly 55 percent of that was for food purchases away from home. When money spent on alcoholic beverages was included in that total, expenditures were $1.83 trillion.

Since 2010, food-at-home expenditures—purchases at grocery stores and other locations with the final purchaser being the consumer—have been decreasing while food-away-from-home expenditures—meals and snacks purchased from commercial food service establishments—have increased. One cause cited by the American Farm Bureau Federation is a rising national median income.

“As the national median income rose from the 20-year low of $54,569 in 2012 to $61,372 in 2017, individuals’ propensity to dine out rose too,” a recent AFBF report noted.

Grocery stores draw the largest portion of food-at-home dollars. Two sectors that saw decreased sales from 2016 to 2017 are dollars spent at mass merchandisers and direct sales by farmers, manufacturers and wholesalers.

“Direct farm, manufacturer and wholesaler sales have stagnated since 2015 and have decreased by $445 million since 2016,” the AFBF report said.

For the nation’s farmers, “the decrease of dollars spent on food at home means there’s a reduction to the share of the food dollar the farmer receives,” shared Megan Nelson, an AFBF economic analyst. “Farmers currently receive about 4 cents of the food dollar when spent away from home.”

The USDA reported in 2016 that farmers receive 23.6 cents for each dollar consumers spend on food to be consumed at home, down 2.9 percent from 2015.

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