Perspectives on Farm Product Marketing

The 20 years following the Agricultural Marketing Act of 1946 brought many changes in the size and structure of the economic system that processes and distributes the abundance from American farms to consumers at home and abroad. It is a big system. In 1965, American consumers spent more than $70 billion for food originating on domestic farms and for food services. Out of this, the marketing system absorbed nearly $50 billion. Over the years, this system has been challenged to handle an ever-increasing volume of goods and services and has achieved an efficiency that is probably unsurpassed. This has coincided with equally remarkable developments on American farms. Farms and marketing firms together provide an abundance and variety of food and related services at a cost of 18 cents from every dollar of disposable income. But the system continues to change as producing and marketing firms try to improve their efficiency and competitive advantage in meeting the demands of a growing and increasingly affluent population. Farmers and businessmen responding to prices choose what products and services to offer, and then bid for the resources needed. Performance improves as firms try new ideas and use the knowledge gained from research and experience. But misallocation recurs as the system grows and is influenced by economic, social, psychological, legal, and political forces. New problems arise which require still more knowledge and further readjustment.