The portion of Americans’ food spending that reaches farmers and ranchers declined again last year, underscoring the growing dominance of processing, transportation and retail costs in the modern food system, according to new federal data.
A newly-released report from the U.S. Department of Agriculture Economic Research Service says that, on average, less than 6 cents of every dollar consumers spend on food reflects the value of raw agricultural commodities. The remainder is tied to a complex supply chain that transforms those commodities into finished products and delivers them to grocery stores and restaurants.
The agency’s Food Dollar Series, which tracks how consumer food expenditures are distributed across the economy, illustrates how value is added at each stage — from processing and packaging to transportation, marketing and food service.
A small and shifting farm share
The latest data indicate that crop producers accounted for about 2.5 cents of each food dollar in 2024, down from 2.9 cents the previous year. Livestock producers, by contrast, saw a modest increase, capturing roughly 3.3 cents, up from 3 cents in 2023.
Combined, farmers and ranchers represented about 5.8 cents of total food system value, a slight decline from the prior year. While the changes are incremental, they reflect ongoing pressure in the crop sector and only limited gains for livestock producers.
Economists note that these figures are averages across all food purchases, blending spending on plant- and animal-based products into a single “food dollar.”
Most spending goes beyond the farm gate
A broader measure of farm returns shows a similar trend. In 2024, farmers received 11.8 cents of every dollar spent on domestically produced food, down from 12.1 cents in 2023 — a 2.5 percent decline.
The remaining 88.2 cents went toward what the USDA calls the “marketing bill,” which includes processing, transportation, packaging, wholesale distribution, retailing and food service.
The shift highlights a long-running structural change in the U.S. food economy: a growing share of consumer spending is driven not by raw production, but by services and value-added activities that occur after commodities leave the farm.
Grocery purchases tell a more nuanced story
The farm share varies widely depending on the type of food consumers buy, particularly for groceries consumed at home.
For food purchased at grocery stores, farmers received about 18.5 cents per dollar in 2024 — a slight increase from 18.4 cents a year earlier. Still, that means more than four-fifths of grocery spending goes to other parts of the supply chain.
Products that require minimal processing tend to return a larger share to producers. Fresh eggs, for example, returned more than two-thirds of the consumer dollar to farmers, while beef and milk each returned roughly half.
By contrast, heavily processed items — such as bakery goods, snack foods and soft drinks — delivered far less to producers, often just a few cents per dollar. In many of those categories, the farm share declined in 2024, reflecting rising costs and value added in manufacturing, branding and distribution.
A system built on services and scale
The data reinforce a central reality of the modern food system: while agricultural production remains essential, most economic value is created after crops and livestock leave the farm.
That dynamic has been driven in part by consumer demand for convenience, variety and ready-to-eat products, as well as the expansion of food service and globalized supply chains.
It also points to a challenge — and an opportunity — for farmers. With such a small share of total food spending tied to raw commodities, producers seeking higher returns increasingly look to value-added strategies, including direct-to-consumer sales, specialized products and deeper integration into processing and distribution.
Even so, the USDA data suggest that, for now, the balance of the food dollar continues to tilt away from the farm and toward the broader network of industries that bring food to American tables.
