Question

1. Discuss the drivers behind the steadily increasing marketing bill in the U.S. over the last 30 years.

Answer 1

Marketing bill refers to the market value added to commodities of farm that are embodied in food dollar expenditure, computed as $1 minus the share of farm. It is a bill for farm-originated food products that represents total charges for all services in marketing performed between product's sale by the farmer and purchase by consumer. It takes into consideration only charges for marketing products consumed by domestic civilian consumers in this country; and excludes marketing charges for sea-foods, imported foods, exported products, other foods not produced on domestic farms, and alcoholic beverages. Since the end of WW II total cost of marketing farm food by civilian consumers in U.S. have steadily increased. It is continuously increasing in U.S. mainly because of three drivers:

-- increase in volume of food marketed

-- more processing and other marketing services

-- rise in charges per unit of food marketed

In the last 30 years there has been a high percentage rise in other costs such as advertising and capital costs. In the year 2017, the share of farm nearly 14.6 cents for each dollar on food expenditure and the marketing bill approximately 85.4 cents in U.S. The consumer expenditure for food farms are less when compared to their personal consumption expenditure. The consumer are spending a declining portion of their income for farm-originated food products and as a result there is a rise in charges per unit of food marketed