The Illusion of Anticompetitive Behavior Created by 100 Years of Misleading Farm Statistics

Abstract

The share of U.S. consumer food-spending that farmers received (the “farm-share”) fell steadily from 48% in 1913 to 20% by 2000, encouraging repeated investigations of that decline. Similar alarms come from “spreads” between prices that farmers receive and prices that consumers pay. However, those measures were biased by purely nominal changes as women (and the food preparation they had done at home) moved into the marketplace. This paper introduces a better measure of how farmers fare in markets, and shows that, if measured properly, the farm-share of total U.S. consumer food costs has been stable.

Keywords: antitrust, agriculture, price-spreads, margins, time allocation, labor force participation

JEL Classification: D13, D33, E25, J10, J11, J16, J22, L40, N52, Q13