US: Agricultural productivity up, real price of outputs down

Productivity growth in the U.S. farm sector has implications for both U.S. and global food markets. The United States is one of the largest consumers and producers in world agricultural commodity markets. Slowing productivity growth that fails to keep pace with increasing food demand may lead to rising food prices. It may also put pressure on low-income households, as these households spend a greater share of their income on food.

Transitory events—such as energy shocks or supply shortages due to bad weather—may cause agricultural commodity prices to rise, the long-term growth trend in U.S. agricultural productivity has enhanced food security and benefited consumers by reducing the real (inflation-adjusted) price of agricultural outputs over time. Between 1948 and 2015, total factor productivity increased by 152 percent, while real agricultural output price declined by nearly 65 percent.

This chart appears in the March 2018 Amber Waves data feature, "Agricultural Productivity Growth in the United States: 1948-2015."