U.S. Food Manufacturing - PowerPoint PPT Presentation

Understand what comprises the Food Manufacturing/Processing Industry.

• Understand the changes occurring within this industry and the resultant implications.
• Specifically:
• Which food types receive the greatest value-added throughout the manufacturing process.
• Recent mergers / consolidation
• Prevalence of production contracts, owner-integration and marketing contracts per product type.
• Identify recent trends in new product offerings and those bearing nutritional claims.
• Understand the degree of direct foreign investment and recent changes to the trade deficit.

U.S. Food Manufacturing

EconS 451: Lecture #2

Source: U.S. Food Marketing System, 2002, ERS-USDA

• All firms and establishments that manufacture or process foods or beverages for human consumption and
• Other related products such as manufactured ice, chewing gum, vegetable and animal fats/oils and prepared feeds for animals and fowl.

Source: U.S. Food Marketing System, 2002, ERS-USDA

Source: U.S. Food Marketing System, 2002, ERS-USDA

• Indication of a mature market

Source: U.S. Food Marketing System, 2002, ERS-USDA

Ratio of Value Added = 1-(Value Added / Shipment Value)

Meat

Dairy

Fats / Oils

Ratio of Value Added

All < 30%

http://www.ams.usda.gov/mnreports/nw_ls410.txt

• Bakery Products
• Beverages

All > 60%

Source: U.S. Food Marketing System, 2002, ERS-USDA

Source: U.S. Food Marketing System, 2002, ERS-USDA

• Sugar Cane
• Market Eggs
• Potatoes
• Fresh Veg.
• Hatching Eggs

Production Contracts

Ownership Integrated

Marketing Contracts

• Sugar Beets
• Processed Veg.
• Broilers
• Hatch Eggs
• Potatoes
• Sugar Cane
• Market Turkeys

• Milk
• Citrus Fruits
• Other Fruits/Nuts
• Dry Beans / Peas

Source: U.S. Food Marketing System, 2002, ERS-USDA

Source: U.S. Food Marketing System, 2002, ERS-USDA

http://www.newint.org/issue172/facts.htm

http://en.wikipedia.org/wiki/Philip_Morris

http://money.cnn.com/magazines/fortune/fortune500/snapshots/562.html

http://www.kelloggcompany.com/kelloggco/our_company/index.html

Source: U.S. Food Marketing System, 2002, ERS-USDA

Source: U.S. Food Marketing System, 2002, ERS-USDA

Source: U.S. Food Marketing System, 2002, ERS-USDA

Source: U.S. Food Marketing System, 2002, ERS-USDA

Source: U.S. Food Marketing System, 2002, ERS-USDA

Source: U.S. Food Marketing System, 2002, ERS-USDA

• Total Employment slightly growing in food processing industry
• Meat Processing accounts for 30%
• Fruit and Veg. Processing accounts for 13%
• Bakery Products 12%
• Cost of Inputs Decreases between 1997-2000
• 12% Less for crude foodstuffs
• 4 % Less for intermediate materials (packaging, etc.)

Source: U.S. Food Marketing System, 2002, ERS-USDA

• Total U.S. Food Manufacturing accounts for about 2% of GDP, the total food and fiber system is about 12% of GDP.
• Proportion of disposable income spent on food continues to drop while total value of all processed food shipments remains relatively flat.
• Concentration in the food processing sector has increased.
• New food products introduced into the market have declined since 1995.
• Those new food products that have been introduced focus on specific nutritional / health claims.
• Food coupon redemption rates are very low.
• Trade deficit in U.S. Food Manufacturing grows.

Source: U.S. Food Marketing System, 2002, ERS-USDA