Concentration and Consolidation in the U.S. Food Supply Chain

Today’s global food system faces the challenge of feeding a population of 7.4 billion that is expected to grow to 11.2 billion by 2100 while supplying an important and perhaps increasing proportion of our fuel needs. Further, modern agriculture is being asked to provide an increasingly complex suite of differentiated products that address issues rarely considered not long ago, such as the nature of inputs into the production process (for example, whether to use genetic engineering), the location of production, the environmental implications of production, the treatment of livestock used in production, and the “fairness” of marketing arrangements to farmers and farm workers. Despite the seeming potential for today’s multicharacteristic agriculture to create profitable niches for small-scale food marketers, food manufacturers in many industries are highly concentrated. This is especially true for farm-product procurement, joined more recently by significant consolidation among grocers and high concentration in local retail markets. These structural conditions are concerning because of their possible implications for market power abuses, the viability of small farms, and overall system performance.