Carpe Diem

Food in America is more affordable than ever before because the US farm sector keeps getting more and more productive

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foodI had a post a few days ago about the increasing affordability of food in the US-based on the declining share of Americans’ consumer expenditures spent on food at home (lowest in the world) and the declining share of disposable personal income spent on all food (at home and away from home) since 1929. For the increasing affordability of food over time in America, I credited innovation, technological advances, and the ever-greater supply chain and distributional efficiencies that drive America’s farming industry, which in turn drive down food prices relative to other goods and services and relative to our income.

The charts above provide some evidence of the increasing efficiency and productivity of food production in America, by showing the historical yields for corn, wheat and soybeans and the historical productivity of milk production per cow, based on USDA data here. Here are some details:

1. The top left chart displays annual corn yields back to 1866, which remained flat at around 25 bushels per acre through the 1940s. And then starting around 1950, corn yields gradually started increasing, and increased by more than 125 bushels per acre between 1950 (38.2 bushels per acre) and the peak of almost 165 bushels per acre in 2009. Since the 1930s, corn yields have increased six-fold.

2. The top right chart shows a similar historical upward trend for wheat yields, which remained flat at about 14 bushels per acre between 1866 and about 1950. Wheat yields reached a record high last year of 47.2 bushels per acre, which is almost a three-fold increase since 1950 (16.5 bushels per acre).

3. The bottom right chart shows the steady increase in the yields for soybeans starting in 1924 at 11 bushels per acre, rising four-fold to a record high of 44 bushels per acre in 2009, slightly higher than last year’s yield of 43.3 bushels per acre.

4. Finally, the bottom right chart shows the historical productivity of milk production, measured as the annual pounds of milk per cow going back to 1924. After remaining flat at just over 4,000 pounds per head during the 1920s, 1930s and 1940s, productivity increased more than four-fold from 5,300 pounds per cow in 1950 to a record high last year of almost 22,000 pounds of milk per cow.

Bottom Line: With a three-fold increase in productivity since 1950 for growing wheat, four-fold productivity increases for growing soybeans and producing milk, and a six-fold productivity increase for corn, it’s not surprising that food affordability in the US is at an all-time high, when measured as a share of all consumer expenditures and as a share of disposable personal income. Food has never been more affordable in America as a direct result of the fact that the productivity of the US farm sector has never been higher – as the four examples above help to illustrate.

20 thoughts on “Food in America is more affordable than ever before because the US farm sector keeps getting more and more productive

    • Well, we nuked Bikini Atolls pretty hard…who knew? Instead of giant ants or 40-foot-women we got huge increases in farm output.

        • Technological improvements :

          i) Biotech : Hybrid seeds
          ii) Analytics that computers could crunch
          iii) More automated farm equipment.

          ….and others.

          The gains seem to be continuing. It is not like the 1980s were the top or anything – gains continue to rise..

    • I have found my answer.

      According to The University of Missouri, there were a number of technological changes that came about in the 1950′s that could explain the increased production:

      -Irrigation
      -Round Balers
      -Corn picker heads for combines
      -Bulk tanks for milk storage
      -small gasoline motors
      -Chemical fertilizers
      -Herbicides
      -vertical integration

      Fascinating

      • What about the so-called “green revolution’?

        Seriously, Monsanto and others have been developing better seeds too…

          • Yep. What about tractors? 1951 was a dramatic high for U.S. tractor production for decades.

            Horses were the primary force on farms for plowing until the 1950s. Here is a rough idea of the comparison of horse plowing vs. tractor:

            “Our estimate is that it would take the team of four horses at least 55 hours to plow a 40 acre field. The modern tractor pulling a 25-foot disc harrow unit would make it across that same 40 acres in a little over an hour.”

          • I would add the expansion of truck transport, which brought more productive farm acreage within reach of the rail network and cities. This would cause the closer, but less productive farm land, to move to industrial and housing usage.

          • And yet, we still have a Plow Horse economy, but “likely to trot a little in 2014″

            Go sit in the corner and think about what you’ve done. :-P

    • I am guessing government subsidies started/were increases.

      Extra CO2 in the air is also supposedly responsible for about 30% of the increase in plant based foods.

  1. With hydroponics (aeroponics, fogponics, etc.) you can grow just about anything anywhere with higher yields than what you get out of planting in soil. Hydroponics though is dependent on cheap power. If a power source could be developed (thorium, advanced nuclear?) to drive down electric rates, you could have the ‘farm’ in the city; providing vine ripened fruits and vegetables. You could also provide very fresh fish via aquaponics.

  2. A slightly tangential point of interest is that the trend in the relationship between the price of rural land and urban incomes has steadily widened in favour of urban incomes (urban productivity has risen a lot faster still); this is a little-understood factor in “urban sprawl”. In cities where there are no anti-growth regulations, new fringe suburbs include larger and larger lots without the real price of housing increasing. Ironically, this is one reason why LA and SF actually “sprawled” in the 1950′s and 60′s with much smaller lots on average than more recent sprawl everywhere else; which has made them the USA’s densest urban areas even though they are still regarded all around the world as the epitome of American sprawl. Meanwhile, cities in other first world nations have been slowly de-densifying and there are many that have ended up significantly less dense than LA and SF, especially in Australia, Canada and France. Even Germany has some.

    But there is no basis for containing urban sprawl to “conserve farmland”. There are efficiencies that should be sought in the regulating of urban economies, but pricing energy and infrastructure properly is the right way to go about it. Anthony Downs (urban economist) says that trying to affect energy consumption and emissions by enacting mandates regarding urban form is like trying to adjust the position of a picture on a wall by trying to move the house rather than the picture.

    There is an excellent essay by the economist Mason Gaffney way back in 1964 entitled “Containment Policies for Urban Sprawl”, in which he points out that the “support” for growth boundaries and so on largely comes from vested interests in property ownership and the exclusion of competitors from the urban economy; Gaffney states the obvious; land taxes and correct pricing of infrastructure use are the correct approach.

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