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).

Supermarket loss data for fresh fruits and vegetables: USDA ERS

Check out this report from the USDA ERS on supermarket loss data for fresh produce and other commodities. From the report abstract:

This study analyzed updated food loss estimates for fresh fruit, vegetables, meat, poultry, and seafood obtained through a competitive grant with the Perishables Group, Inc. The new estimates were obtained for use in the ERS Loss-Adjusted Food Availability data. They had little impact on per capita food loss estimates because the new estimates are generally close to the current loss assumptions. The new estimates would increase annual per capita estimates at the retail level by 0.7 pounds (0.6 percent) for fresh fruit, 4.2 pounds (2.7 percent) for fresh vegetables, and 4.8 pounds (2.7 percent) for fresh meat, poultry, and seafood.

From the report summary:

ERS maintains the web-based Loss-Adjusted Food Availability data series, an important resource for estimating trends in the amount of food available for consumption over time. By tracking food loss—food made inedible by moisture loss, spoilage, and other causes—analysts can estimate how much food is eaten per person over a given period. What Is the Issue? Some of the food-loss assumptions used in the ERS Loss-Adjusted Food Availability data were seemingly simplistic and may not have refl ected current manufacturing, retail, and food reparation practices. Retail food loss was particularly diffi cult to estimate. Prior to this study, the per capita food loss estimates at the retail level were, across the board, 12 percent for every fresh fruit and vegetable commodity (e.g., fresh strawberries, fresh spinach) and 7 percent for every type of meat, poultry, and seafood (i.e., fi sh and shellfi sh, both farm-raised and wild-caught) covered in the database. More precise estimates for each fresh commodity are desirable to refl ect physical differences in spoilage rates and other reasons that infl uence food loss, such as use of innovative packaging to prolong shelf life. Using new estimates for each commodity could affect ERS calculations of the amounts of different foods available for consumption.

What Did the Study Find?
This report and the accompanying ERS Loss-Adjusted Food Availability data give analysts, for the fi rst time, national estimates of the food loss percentage at the supermarket level for each fresh fruit, vegetable, meat, and poultry commodity in the data set. The average loss rates for 2005-06 for individual fresh fruit, vegetable, meat, and poultry commodities at the supermarket level, as estimated by the Perishables Group, Inc., varied from 0.6 percent for sweet corn to 63.6 percent for mustard greens. The study also provided new average stimates for all fi sh and all shellfi sh. When the study incorporated the new loss estimates into the ERS Loss-Adjusted Food Availability data series, the impact on per capita estimates varied broadly among commodities within a food group (e.g., among all fresh fruit). The largest annual impacts, per capita, were for fresh potatoes, chicken, beef, pork, bananas, and sweet corn—all of which have high shares of food available for consumption for their espective food groups. However, as a whole, the new food loss estimates had little impact on average food loss rates for each food group in the ERS Loss-Adjusted Food Availability data series or on per capita estimates of the quantity of the different food groups available for consumption at the retail level because the newer estimates were generally close to the earlier loss assumptions. Compared with the earlier ERS per capita food loss estimates of 12 percent for each type of fruit and vegetable and 7 percent for each type of meat, poultry, and seafood covered in the database, ERS found that annual supermarket losses for 2005 and 2006 averaged 11.4 percent for fresh fruit, 9.7 percent for fresh vegetables, and 4.5 percent for fresh meat, poultry, and seafood. The new estimates would increase per capita estimates at the retail level in 2005 by 0.7 pounds (0.6 percent) for fresh fruit, 4.2 pounds (2.7 percent) for fresh vegetables, and 4.8 pounds (2.7 percent) for fresh meat, poultry, and seafood. Dividing these annual changes in per capita estimates by 365 days results in very small daily per capita changes.

How Was the Study Conducted?
ERS obtained updated food loss estimates at the retail level for individual fresh fruits, vegetables, meat, and poultry and aggregate estimates for all fi sh and all shellfi sh from the Perishables Group, Inc., and applied them to update some of the assumptions used in constructing ERS Loss-Adjusted Food Availability data to see how they affected per capita
estimates of the food available for consumption. The Perishables Group, Inc., an independent consulting fi rm, used a sample of data from six large national and regional supermarket retailers from their proprietary database. The sample did not include convenience stores, megastores, club stores, and mom-and-pop grocery stores. For each store in the sample, supplier shipment data for 2005 and 2006 was paired with point-of-sale data to identify food loss percentages for each covered commodity. For fresh meat, poultry, and seafood, data were supplemented by the Perishables Group with qualitative information from more than 10 retailers. The study also compared loss estimates for 2005 and 2006 as a validation of methods used.