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The video above features the amazing 25,000-acre (40 square miles) Fair Oaks Dairy Farm in Indiana, where 32,000 dairy cows produce 2.5 million pounds of milk every day, which is enough milk from that one farm for all of the people in Chicago and Indianapolis (8 million residents). The herd of dairy cattle is so large that more than 80 calves are born every day, and the public is allowed to watch the births in a special glass-walled theater, as well as tour the entire facility. All of the farm’s energy is generated from the cow manure that is collected, processed and turned into methane, which then powers 100 percent of the farm’s electricity.
The significant technological advances and efficiency gains in U.S. farming illustrated by the Fair Oaks Farm have contributed to making food increasingly more affordable for Americans, both in terms of prices paid, and spending on food as a share of total consumption expenditures. The chart below illustrates the decrease in the inflation-adjusted wholesale price of milk since 1890. In recent years, the price of about $8 per hundred pounds of milk is about half of the price in the 1960s and 1970s and about one-third of the price of the 1920s, thanks to the significant efficiency gains from producing milk in large-scale operations like the Fair Oaks Farm.
And it’s not just milk that has become cheaper over time, all of our food has continually gotten more affordable relative to our overall consumption spending (see chart below). Spending on food now accounts for only about 7.5 percent of our total U.S. consumption expenditures (BEA data here), which is down from 15 percent of spending on food in the 1970s and down from more than 20 percent in the 1930s and 1940s.
In an updated international comparison of spending on food in 2011 as a share of consumption expenditures by the USDA, America remained the world leader for the most affordable food on the planet at only 6.7 percent of our consumer spending, compared to 10-15 percent for most European countries, and 20-40 percent for most developing economies.
Bottom Line: We hear all the time about stagnating or declining household income, the disappearing middle class, and how today’s generation will be worse off than their parents. But we shouldn’t lose sight of the constant improvements taking place in our manufacturing industries like U.S. agriculture, illustrated by the Fair Oaks Farm video above, that continually lower food costs for Americans and raise our standard of living. Food for Americans has never been cheaper than today, and there’s no place on the planet where food is more affordable than in the U.S., thanks to the miracle of American farming.
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