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I had a post a few days ago about the increasing affordability of food in the US-based on the declining share of Americans’ consumer expenditures spent on food at home (lowest in the world) and the declining share of disposable personal income spent on all food (at home and away from home) since 1929. For the increasing affordability of food over time in America, I credited innovation, technological advances, and the ever-greater supply chain and distributional efficiencies that drive America’s farming industry, which in turn drive down food prices relative to other goods and services and relative to our income.
The charts above provide some evidence of the increasing efficiency and productivity of food production in America, by showing the historical yields for corn, wheat and soybeans and the historical productivity of milk production per cow, based on USDA data here. Here are some details:
1. The top left chart displays annual corn yields back to 1866, which remained flat at around 25 bushels per acre through the 1940s. And then starting around 1950, corn yields gradually started increasing, and increased by more than 125 bushels per acre between 1950 (38.2 bushels per acre) and the peak of almost 165 bushels per acre in 2009. Since the 1930s, corn yields have increased six-fold.
2. The top right chart shows a similar historical upward trend for wheat yields, which remained flat at about 14 bushels per acre between 1866 and about 1950. Wheat yields reached a record high last year of 47.2 bushels per acre, which is almost a three-fold increase since 1950 (16.5 bushels per acre).
3. The bottom right chart shows the steady increase in the yields for soybeans starting in 1924 at 11 bushels per acre, rising four-fold to a record high of 44 bushels per acre in 2009, slightly higher than last year’s yield of 43.3 bushels per acre.
4. Finally, the bottom right chart shows the historical productivity of milk production, measured as the annual pounds of milk per cow going back to 1924. After remaining flat at just over 4,000 pounds per head during the 1920s, 1930s and 1940s, productivity increased more than four-fold from 5,300 pounds per cow in 1950 to a record high last year of almost 22,000 pounds of milk per cow.
Bottom Line: With a three-fold increase in productivity since 1950 for growing wheat, four-fold productivity increases for growing soybeans and producing milk, and a six-fold productivity increase for corn, it’s not surprising that food affordability in the US is at an all-time high, when measured as a share of all consumer expenditures and as a share of disposable personal income. Food has never been more affordable in America as a direct result of the fact that the productivity of the US farm sector has never been higher – as the four examples above help to illustrate.
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