- Retailer I Wholesaler I Transportation! Packer I Producer 



Farm-Retail Spreads For 



Fruits and Vegetables 



Who gets the retail dollars spent on farm commodi- 

 ties? Although this question is currently receiving much 

 attention, concern in this regard is not a recent devel- 

 opment. Early in the agricultural history of the United 

 States the task of marketing farm products began to 

 shift from producers to specialized marketing agents. 

 As a consequence, producers received only a portion 

 of the retail price and they soon had doubts as to the 

 equity of their share. Marketing agents also became 

 increasingly aware of their shares as the scope and 

 complexity of marketing increased. Most recently, the 

 President focused attention on the consumers' stake in 

 the issue and initiated measures in their interest includ- 

 ing the appointment of a Special Assistant to the Presi- 

 dent for Consumer Affairs and requests for Congres- 

 sional support. 



In response to the growing need for information on 

 the division or sharing of the retail value of farm 

 products, the U.S. Department of Agriculture devel- 

 oped a broad, continuing research program in the area 



Dr. Edman received his B.S. and M.S. degrees at the 

 University of Arizona. He was employed in Arizona 

 at agriculture-related work, primarily teaching, until 

 1958. During the next 3 years, while research assistant 

 at the University of Florida, he completed requirements 

 for the Ph.D. degree in Agricultural Economics. Since 

 1961 he has been engaged in margin research on fruits 

 and vegetables as an employee of the Department of 

 Agriculture. He is in the Marketing Economics Divi- 

 sion of the Department's Economic Research Service. 



By VICTOR G. EDMAN 



Agricultural Economist 

 U. S. Department of 

 Agriculture 



of farm-retail spreads for food products. Information 

 stemming from this program has been made available 

 in numerous publications issued by the Department. 

 An example is a recent release, Statistical Bulletin 340, 

 "Prices and Spreads for Fresh Fruits and Vegetables 

 Sold in Selected Markets, 1956-1962." 



It is the purpose of this article to explain how this 

 and similar publications are prepared and how they 

 may be interpreted and utilized most effectively. 



Farm-Retail Spreads Defined 



Expenditures by consumers for food are divided be- 

 tween two groups — the producers, and the agents who 

 perform the functions of marketing. In terminology 

 adopted by the Department of Agriculture, the portion 

 received by producers is called farm value or growers' 

 return and the part received by marketing agents is 

 called the farm-retail spread or marketing margin. The 

 farm-retail spread is, therefore, the difference between 

 the farm value of a given amount of a commodity and 

 its retail value adjusted for loss incurred in marketing. 

 It is the total of charges made by those who perform 

 food product services between farms and consumers. 

 The usefulness of this statistic may be increased by 

 dividing it into components. This can be done on the 



