Developments in Marketing Spreads for Agricultural Products in 1964

Report Highlights: The spread between the retail cost and farm value of foods in the market basket of farm-originated foods increased less than 0.5 percent last year. This was the smallest annual rise since 1960. The small increase in 1964 reflected stability in prices of goods (not including raw materials) and services used by marketing firms. Retail prices of farm foods averaged less than 0.5 percent higher in 1964 than the year before. This was the smallest annual gain since 1959, the last year retail prices decreased. Prices farmers received for food products last year averaged about the same as in 1963. Also, their share of the retail food dollar, at 37 cents, stayed the same. Consumers spent 18.5 percent of their disposable income for food last year, compared with 18.9 percent in 1963, although per capita expenditures for food kept rising. The proportion of disposable income spent for food has declined in all but 2 years since 1947, when it was 26.9 percent. The spread between retail prices and farm values of Choice beef increased to a record annual average of 35.4 cents per retail pound in 1964, 1.0 cent more than the average for 1963. Retail prices of Choice beef averaged 77.8 cents per pound last year, 3.2 cents lower than in 1963. The farm value averaged 42.4 cents, down 4.2 cents from the 1963 average. These changes accompanied an increase of 12 percent in beef production. Retail prices of cotton clothing and house furnishings averaged about the same in 1964 as the year before, but prices farmers received for lint cotton used in making these goods declined 1 cent per pound. The marketing spread was 1 cent larger in 1964, excluding the Federal equalization payment of 6.5 cents to domestic users of eligible raw U.S. cotton. Consumer expenditures for cigarettes increased in 1963 (the latest data available) as a result of increased consumption and a rise in retail prices. However, returns to farmers from the tobacco in these cigarettes declined slightly because of lower prices for leaf tobacco.