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Developments in Marketing Spreads for Agricultural Products in 1973

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  • 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.

Suggested Citation

  • Economic Research Service, 1974. "Developments in Marketing Spreads for Agricultural Products in 1973," Miscellaneous Publications 324744, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersmp:324744
    DOI: 10.22004/ag.econ.324744
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