Food and agriculture remain one of the largest drivers of the U.S. economy, generating $10.4 trillion in total output and supporting nearly 49 million jobs, according to the 2026 Feeding the Economy report highlighted by Daniel Munch, American Farm Bureau Federation (AFBF) economist. Yet even as the sector accounts for roughly 20% of all economic activity, the share of the value returned to farmers continues to shrink.
Data from the USDA Economic Research Service, disseminated by AFBF economist Faith Parum, show farmers and ranchers received just 5.8 cents of every food dollar in 2024, down from 5.9 cents the year prior. Crop producers saw their share fall from 2.9 cents to 2.5 cents, while livestock producers’ share increased slightly, rising from 3 cents to 3.3 cents.
“While farmers and ranchers are the foundation of food production, most of the economic value is created after products leave the farm,” Parum noted, pointing to the growing role of processing, transportation, packaging and retail.
Parum said the shift is evident in the “marketing bill,” which accounted for 88.2 cents of every dollar spent on U.S.-produced food in 2024. Farmers’ share fell to 11.8 cents, highlighting how much of that dollar goes to processing, transportation and retail after products leave the farm.
While the farm share remains small overall, it varies widely by product. Minimally processed goods return a larger portion of the dollar to producers. Fresh eggs returned 69.1 cents per dollar to farmers in 2024, while beef reached 52.2 cents and milk 50.8 cents. Pork rose to 23.7 cents, with poultry and fish also posting modest gains. By contrast, heavily processed foods returned far less. Bakery products dropped to 4.8 cents per dollar, snack foods to 9.7 cents and soft drinks to just 1.3 cents.
Despite the small share retained by producers, agriculture’s broader economic footprint is immense. Munch emphasized that food and agriculture support about 30% of total U.S. employment, or roughly one in three jobs, even though on-farm employment accounts for less than 2%.
“The economic reach of food and agriculture is especially evident in the jobs and income it supports across the broader economy,” Munch said, noting that food manufacturing, wholesaling and retailing alone account for more than 24 million jobs. Another 24 million jobs are supported through supplier industries and household spending tied to the sector.
Altogether, the system generates more than $3 trillion in wages and salaries and contributes over $1.3 trillion in tax revenue at the local, state and federal levels, according to Munch.
The role of food and agriculture varies widely by state, Munch said, citing the 2026 Feeding the Economy report. In total dollars, the largest ag economies tend to be those with both strong production and large consumer markets. California leads with more than $1.2 trillion in food and agriculture output, followed by Texas at $964 billion, Florida at $560 billion and New York at $494 billion. Munch noted that in these states, the sector’s impact stretches well beyond the farm, supported by extensive food manufacturing, transportation and retail networks.
But when measured as a share of a state’s total economy, a different picture emerges. Munch points out that in states like Iowa and Nebraska, food and agriculture account for about 44% of all economic activity, followed by South Dakota at 41%, Idaho at 35% and Kansas at 32%. In these regions, shifts in commodity markets or input costs can have a more direct effect on jobs, tax revenue and local businesses.
Even in more diversified states, however, the 2026 report shows that agriculture still accounts for at least 12% of economic activity, underscoring how deeply the sector is woven into the broader U.S. economy.
Munch noted that keeping production in the U.S. helps support jobs, wages and supply chains at home. At the same time, declines in areas like fruits and vegetables raise the risk of more economic activity moving overseas.
“The economic contribution of food and agriculture, and critically its domestic presence within the United States, is essential to food security and economic stability,” Munch said. “At its core, this is not just about food. It is about whether the economic engine tied to feeding, fueling and clothing a nation remains rooted at home or gradually shifts beyond U.S. borders. — Charles Wallace, WLJ contributing editor
