outstanding studies of this era originated in a Congres- 

 sional directive to the Federal Trade Commission to 

 investigate and report the extent of decline in agricul- 

 tural income and other problems including the distri- 

 bution of the consumers' food dollars. 



In the U. S. Department of Agriculture, methodology 

 for research on farm-retail spreads was quite well 

 developed by the early 1900's. Two statistical series 

 of the Department date from 1913. In 1935 the 

 Department issued a report titled, "The Margin Between 

 Farm Prices and Retail Prices of Ten Foods." The 

 following year coverage was expanded to 58 food items. 

 Increased emphasis on this type of research resulted 

 from the Agricultural Marketing Act of 1946 which, 

 among other things, directed the Secretary of Agricul- 

 ture to determine the costs of marketing agricultural 

 products and to foster marketing methods that would 

 reduce the price spread between producer and consumer. 

 For a number of years, Congress has allocated funds 

 earmarked specifically for research on marketing 

 margins. Gradually, the research objectives of this 

 program have broadened to include, in addition to 

 description of size and trends, a breakdown of the 

 farm-retail spread into components and an explanation 

 of factors affecting the spread. 



The Present Research Program 



Two major statistical series have evolved from the 

 Department's research program — the market basket and 

 the marketing bill. These appear regularly in the 

 "Marketing and Transportation Situation," a publi- 

 cation of the Economic Research Service, USDA. The 

 market basket of farm food series consists of the retail 

 cost, farm value, farm-retail spread, and farmers' share 

 of the retail cost of a fixed quantity of food — the 

 average amount bought per family for home consump- 

 tion by urban wage-earner and clerical-worker families. 

 These series measure changes in farm and retail prices 

 and marketing charges, and changes in the shares 

 received by farmers and marketing agents but do not 

 account for changes in services or types and quantities 

 of food purchased. The data are also shown by com- 

 modity groups, one of which is fruits and vegetables. 

 This group is further divided into fresh and processed 

 products and in addition, information is presented for 

 47 individual commodities. 



The farm food marketing bill series, on the other 

 hand, measures total domestic civilian expenditures for 

 food products originating on farms in this country, the 

 total amount received by farmers for the equivalent 

 farm products and the total amount received by 

 marketing agencies. This series, therefore, is affected 

 by variations in volume marketed, unit marketing 

 charges, and changes in marketing services associated 

 with the food products. 



Since 1956, while continuing existing series, the 

 Department's margin program has been expanded to 

 permit reporting in greater detail. Data collection was 

 increased so that margins could be calculated for 



commodity subdivisions. For fruits and vegetables this 

 consisted of breakdowns by varieties or types, grades, 

 sizes, markets, and production areas. In addition, 

 studies have been made of individual commodities or 

 products that present a detailed breakdown of the 

 distribution of the retail value together with some 

 explanation and analysis. Most of the common fruits 

 and vegetables have been the subject of at least one 

 such study. Although these reports have the advantage 

 of considerable detail, they have the disadvantage of 

 being limited to a relatively short time period and do 

 not show long-run changes. 



Conclusion 



Interest in the division of the retail value of farm 

 commodities among marketing agents and producers 

 developed concurrently with the historical shift of 

 marketing functions from producers to specialized 

 marketing agents. At first the interest stemmed 

 primarily from farmers and. farmer-oriented groups. 

 Later, particularly with the advent of government 

 agricultural programs, various economic and legislative 

 groups required information on farm-retail spreads. In 

 response to the general interest plus numerous specific 

 needs, the Department developed a broad, continuing 

 research program in the area of price spreads. 



While it may be assumed that this program has 

 contributed to adjustments and improvements in the 

 marketing system, there yet remains the challenge of 

 many unanswered questions. For the future is the task 

 of increasing the accuracy of measurement plus more 

 complex problems such as gaining a better under- 

 standing of the underlying methods and rationales 

 associated with spreads, measuring the distribution of 

 the retail value relative to returns to input resources or 

 other suitable standards, and applying new knowledge so 

 as to increase marketing efficiency. 



PRICE STATISTICS IN UNITED'S 

 LIBRARY GO BACK SCORES OF YEARS 



Why anyone would want to know the wholesale price 

 of mushrooms by months for the last 10 years; the retail 

 price of bananas in 1919; or the farm price of potatoes 

 in 1866 can't be explained here — but requests of this 

 kind come in to the United library. Such prices are 

 readily provided, or a reference given to the appropriate 

 source. The United library maintains price series on 

 fresh fruits and vegetables for many years, just as it 

 maintains material, both new and old on almost all 

 phases of marketing of these products. The library's 

 large and continually increasing resources are at the 

 service of United members. 



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