Developments in Marketing Spreads for Agricultural Products in 1973

Economic Research Service

No 324744, Miscellaneous Publications from United States Department of Agriculture, Economic Research Service

Abstract: Amid a strong upsurge in demand and reduced food supplies, the retail cost of a market basket of farm foods averaged 17 percent higher in 1973 than in 1972. The farm value of all food in the market basket averaged nearly a third higher. The farmer's share of the food dollar averaged 46 cents, 6 cents higher than in 1972, and the largest share in 20 years. The farm-to-retail spread, or gross marketing margin, continued to widen in 1973, averaging 6½ percent higher than in 1972. Estimates of cost and profit components of margins for 19 leading food products reveal that labor and packaging costs account for half to two-thirds of the processing margin for most of the items studied. Labor costs alone account for around half of retail store margins. Most other cost components of processing and retailing margins, such as business taxes, advertising, repairs, and rent are around 5 percent or less of the total margin.

Keywords: Demand and Price Analysis; Labor and Human Capital; Marketing (search for similar items in EconPapers)
Pages: 62
Date: 1974-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersmp:324744

DOI: 10.22004/ag.econ.324744

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