The Illusion of Anticompetitive Behavior Created by 100 Years of Misleading Farm Statistics

Posted by D. Daniel Sokol

Sheldon Kimmel (DOJ) has an article on The Illusion of Anticompetitive Behavior Created by 100 Years of Misleading Farm Statistics.

ABSTRACT: The share of U.S. consumer food-spending that farmers received (the “farm-share”) fell steadily from 48% in 1913 to only 20% by 2000, prompting repeated investigations into who might be to blame for that decline. Similar alarms come from the other standard measure of how markets treat farmers, the farm-retail, “price spread.” However, this paper explains the biases built into these measures: Both of these measures are distorted by purely nominal changes. This paper introduces a better measure of how markets have treated farmers, and shows that, if measured properly, the farm-share of total consumer food costs has been stable.