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April 2006, Volume 12, Number 2

US Ag, Food Aid, Obesity

The 2006 Economic Report of the President reviews agricultural policy, noting that farming households had 25 percent of US residents in 1930, compared to one percent in 2000; the rural share of the US population fell from 44 to 21 percent. Farming households had lower incomes than nonfarm households, a pattern that reversed by the 1970s.

In 2004, almost 1.4 million farms were considered "rural residences" with annual farm sales under $250,000 and a farm operator who is retired or has a nonfarm occupation, and they on average lost $640 farming. There were 530,000 intermediate farms with sales less than $250,000 operated by non-retired farmers that generated net cash farm income averaging $14,600, but these farms also had an average of $50,000 in nonfarm income.

The 158,0000 commercial farms with sales of over $250,000 had an average of $226,000 in net farm income. Commercial farms were less than 10 percent of all farms in 2003, but accounted for 72 percent of farm production and a third of government farm payments. Under the 2002 Farm Bill, the five "program" crops that receive subsidies receive $15 billion, while FVH commodities receive $500 million.

More US corn is being used for ethanol, the fuel that is made from corn- Iowa expects to have 30 ethanol plants by the end of 2006. As countries from Brazil to India shift toward crop-based fuels, rising energy prices could soon be reflected in rising food prices, as corn and other crops are diverted to make ethanol. Eventually, US corn production could rise, and wheat and cotton production fall.

Greenhouse tomatoes, grown under cover and picked when ripe, are gaining favor with consumers- they accounted for almost 40 percent of US retail fresh tomato sales in 2005. North American greenhouse tomato production rose from practically zero in the early 1990s to 528,000 tons in 2003, with Canada producing 42 percent; the US, 30 percent; and Mexico, 28 percent. Canada dominates production between March and December, but Mexico, which has the most area in greenhouse tomato production, can produce year-round. Americans consume an average 20 pounds of tomatoes a year.

Food Assistance. The USDA operates 15 food assistance programs at a cost of $51 billion in FY05, 55 percent of USDA expenditures. The most expensive program is the Food Stamp Program, which provided an average $92 a month to 26 million people at an annual cost of $31 billion. The National School Lunch Program spent $10 billion providing breakfast and lunch at school to an average 30 million pupils, and the WIC program spent $5 billion providing services to women and newborns.

Obesity. The so-called obesity industry generated $315 billion in 2005, including $134 billion for fast-food restaurants, $125 billion for medical treatments related to obesity and $2 billion for diet books. About 3,500 calories translates into one pound on an average person, and eating more high-calorie foods while exercising less is a recipe for gaining weight.

Americans consumed an average 50 gallons of carbonated soft drinks in 1999, followed by 25 gallons of coffee, 23 gallons of milk, 16 gallons each of bottled water and fruit juices, and eight gallons of tea. The place where these drinks were consumed varied- 80 percent of fruit juices were consumed at home, but 70 percent of bottled water and 60 percent of soft drinks were consumed away from home.

The calorie content of drinks varies widely, from zero for water and diet soft drinks to over 400 for some coffee drinks. As Americans consume more food away from home, they tend to increase their consumption of soft drinks and non-milk drinks.

Chicago has long been the US chocolate and candy capital, but many firms have moved abroad to take advantage of lower sugar prices.

An estimated 50 million US households use lawn-care services, and most want a perfect lawn. According to Steinberg, until the 1950s most American lawns included clover, which can fertilize the soil by adding nitrogen. Lawn-care companies in the 1950s removed clover from the "perfect lawn," thus stimulating business for their services, which included fertilizer.

Two federal reports released in February 2006 concluded that Americans do not pay all the taxes they owe. According to the IRS, cheating on business income was "a problem 50 times larger" than cheating by wage earners, as especially proprietors of unincorporated businesses, who typically file a Schedule C with their tax return, under-reported their incomes. In percentage terms, farmers cheated the most, failing to pay the government $6 billion, or 72 percent of the taxes they should have.

The Chesapeake Bay is the largest US estuary, some 64,000 square miles, but its oyster industry is declining rapidly. Oysters filter water, but disease, pollution and overfishing have reduced their number, prompting plans to introduce Asian oysters.

Wolves were re-introduced by the federal government into Yellowstone National Park in 1994, and have repopulated parts of Montana, Wyoming and Idaho. The federal Fish and Wildlife Service wants to take wolves off the endangered species list, but Wyoming wants to go further and allow wolves to be killed anytime they are outside Yellowstone, a plan opposed by Fish and Wildlife Service. Wolves are being killed in Wyoming, but ranchers say that more need to be killed to keep the number of wolves at federal minimum levels of 10 breeding pairs and 100 wolves.

Steinberg, Ted. 2006. American Green: The Obsessive Quest for the Perfect Lawn. W.W. Norton