Structure of Food and Agricultural Sector

This chapter identifies the major structural characteristics that should be examined in assessing the economic performance of the US food and agricultural sector. The food and agricultural sector consists of many internal as well as many external linkages that condition both firm behavior and structure. Money income of farm households includes income from both farm and nonfarm sources, but excludes all nonmoney income, such as the value of food produced and consumed on the farm, changes in the value of inventories, and estimated rental value of farm dwellings. Much of the growth in food processing and farm input industries have occurred through mergers, acquisitions, leveraged buyouts, and divestitures. The industries downstream from the farm—those upon which farmers depend for their market—are even more globally oriented so that foreign markets have provided opportunities for expansion of many US food processing firms. Food processing firms seek to produce finished products in foreign plants rather than export from domestic plants for several reasons.