[Agriculture Fact Book 98]
The estimated bill for marketing domestically grown and consumed foods was $441 billion in 1997. This amount covered all charges for transporting, processing, and distributing foods that originated on U.S. farms. It represented 79 percent of the $561 billion consumers spent for these foods. The remaining 21 percent, or $120 billion, represents the gross return paid to farmers.
The cost of marketing food has increased considerably over the years, mainly because of rising costs of labor, transportation, food packaging materials, and other inputs used in marketing, and also because of the growing volume of food and the increase in services provided with the food. In 1987, the cost of marketing farm foods amounted to $285 billion. In the decade since, the cost of marketing rose about 55 percent. From 1996 to 1997, the marketing bill rose 4 percent.
These rising costs have been the principal factor affecting the rise in consumer food expenditures. From 1987 to 1997, consumer expenditures for domestically grown food rose $186 billion. Nearly 85 percent of this increase resulted from an increase in the marketing costs.
The cost of labor is the biggest part of the total food marketing bill, accounting for nearly half of all marketing costs. Labor used by assemblers, manufacturers, wholesalers, retailers, and eating places cost $216 billion in 1997. This was 5.7 percent higher than in 1996 and 66 percent more than in 1987. The total number of food marketing workers in 1997 was about 13.7 million, about 19 percent more than a decade earlier. Nearly 70 percent of the growth in food industry employment occurred in public eating places.
A wide variety of costs comprise the balance of the marketing bill. These costs include packaging, transportation, energy, advertising, business taxes, net interest, depreciation, rent, and repairs. Their relative proportions are illustrated in the accompanying dollar chart.
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