Posted September 18, 2014
Overseas milling and baking customers may be interested in new data from USDA’s Economic Research Service that breaks out the costs included in $1 paid for breads, crackers, cookies and other baked goods in the United States in 2007.
ERS says farm production and agribusiness, which represent the value that farm income and input costs add to the bakery food dollar, equaled 3.6 percent of the bakery dollar ($1 = 100 cents) that year. Farm production was 2.3 percent and agribusiness represented 1.5 percent of the dollar. Those amounts were lower than transportation, packaging and advertising costs. Not surprisingly, processing (including milling and baking) added the largest cost component at 37.7 percent followed by retail and wholesale costs.
Although the data is for costs from seven years ago, in the costs ERS also provided for 1997 and 2002 reflect a trend. In 1997, farm production cost was 2.6 percent and agribusiness was 1.2 percent. In 2002, farm production fell to 1.9 percent while agribusiness was 1.3 percent.
Industry costs that make up the bakery dollar will vary from country to country, but millers need their grist and bakers need their flour. Though their labor represents a small portion of the total, this information is a very good reminder of the complexity of this industry’s value chain — and how important wheat farmers are at the base of it all.
Source: USDA Economic Research Service. http://www.ers.usda.gov/data-products/food-dollar-series/food-dollar-application.aspx#.VBdH1PldV8E