WIC and the farm economy

As first noted by Luis in this Fresh Produce Industry Discussion Group in this post, the USDA has issued a report on the economic linkages between the WIC nutrition program and the farm sector. From the report:


Although States have until October 1, 2009, to implement the revised food packages, this analysis assumes that the revisions in the WIC food packages were implemented in all States in fiscal 2008. We estimated retail sales of food in the revised WIC food packages to be $4.6 billion after rebates in fiscal 2008 (see box, “How Was the Study Conducted?”). WIC sales by food item—based on the revised WIC food packages—are shown in figure 1. Even with the reductions in milk associated with the revised WIC food packages, milk has the largest sales—$978 million. About two-thirds (67 percent) of all WIC food sales are accounted for by milk (21 percent), infant formula (19 percent, measured on a post-rebate basis), breakfast cereal (13 percent), and fruits and vegetables (13 percent). Our analysis indicates that farmers receive almost $1.3 billion from the sale of commodities that are used in producing the $4.6 billion in WIC retail food sales. A food’s path from its raw form at the farm to a finished product in a WIC household may take various routes with few or many stops along the way. WIC foods that undergo minimal processing, such as eggs and fresh fruits and vegetables, which essentially go from the farm through the wholesale trade and transportation system to retail vendors, account for $289 million (23 percent) of farm revenues realized from the sale of WIC foods (fig. 2). The largest share of farm revenue ($585 million, or 46 percent) is from farm commodities that undergo one stage of processing into WIC foods—for example, raw milk from the farm processed into the milk we drink. WIC foods that involve two stages of
processing—for example, wheat and other grains processed by the miller and ultimately made into whole grain bread or breakfast cereal—contribute $149 million of farm revenue (12 percent). In addition to farm commodities used by food processors to produce WIC foods, the production of these farm commodities may also involve the use of other farm commodities. Examples include feed for dairy cows and poultry (whether in the form of raw grains and hay or processed grains) and seed for grain production. These farm commodities account for $177 million (14 percent) of farm revenue. The remaining $75 million (6 percent) in farm revenue are from other uses of farm commodities in the production of WIC foods that are not accounted for above.

Of the estimated $1.3 billion in total farm revenue from WIC food sales, livestock and crop farms receive $707 million and $567 million, respectively (table 1). Dairy farms receive the most revenues at $569 million (45 percent), fruits and vegetables are second with $292 million (23 percent), and grains are third with $171 million (13 percent).