Issue: USDA’s child nutrition programs generate additional food consumption, which increases production, value

added, and jobs on U.S. farms. Farm “value added” is a

measure of labor earnings and the returns to farm ownership. This research brief estimates program-specific

impacts for the Special Supplemental Nutrition Program

for Women, Infants, and Children (WIC), the Child and

Adult Care Food Program (CACFP) and a combined group

of “school programs” (the National School Lunch, School

Breakfast, Special Milk, and Summer Food Service

Programs).

Findings: Estimated impacts depend in part on the program’s additionality—the amount by which a dollar of program spending results in additional food consumption. Two

cases are examined that differ in their treatment of additionality in WIC. Case 1 uses a value of zero, based on a single

study for WIC that did not find any additionality. Case 2

adopts an alternative figure of 26 percent, based on additionality values for the Food Stamp Program. A program’s

estimated additional food expenditures, reported in the first

row of table 1, depends on its additionality and its 2001

funding level. Table 1 also reports the estimated impacts.

Under Case 1, child nutrition programs increase farm production by $1,035 million (0.4 percent of farm cash

receipts). Farm value added—labor earnings and the

returns to farm ownership—increases by $318 million.

Additional farm labor is roughly 9,200 jobs; in comparison, there were about 2 million farm jobs in 2001. 

United States

Department of

Agriculture

Economic 

Research

Service

WIC School

meals

CACPF General

Importance of Child

Nutrition Programs to

Agriculture

Food Assistance Research Brief

Kenneth Hanson, khanson@ers.usda.gov, (202) 694-5427

Table 1. Farm sector impacts from child nutrition programs, $ millions and number of jobs

Program specific additional food expenditures

Case 1 Case 2

School WIC Case 1 WIC Case 2

Programs1 CACFP2 Zero add Total 26% add Total

Additional food expenditures, $ million 1,969 376 0 2,344 782 3,126

Farm production (cash receipts), $ mil. 870 166 0 1,035 435 1,470

Livestock and poultry 284 54 0 338 40 377

Dairy 222 42 0 264 224 488

Crops 364 70 0 434 172 605

Fruits and vegetables 130 25 0 155 13 168

Other crops (mostly food and feed grains) 235 45 0 279 158 437

Farm value added (inc. depreciation), $ mil. 267 51 0 318 128 446

Livestock and poultry 48 9 0 57 7 64

Dairy 36 7 0 43 37 80

Crops 183 35 0 218 84 302

Fruits and vegetables 68 13 0 81 7 88

Other crops (mostly food and feed grains) 115 22 0 137 77 214

Farm jobs, number of jobs 7,738 1,476 0 9,214 3,870 13,084

Livestock and poultry 2,524 483 0 3,007 352 3,359

Dairy 1,972 375 0 2,346 1,992 4,338

Crops 3,242 619 0 3,861 1,527 5,387

Fruits and vegetables 1,154 221 0 1,375 120 1,495

Other crops (mostly food and feed grains) 2,087 398 0 2,485 1,407 3,892

Data source: USDA-ERS calculations.

1School Programs include National School Lunch Program, School Breakfast Program, Summer Food Service Program, and Special Milk Program 2Child and Adult Care Food Program (CACFP)

Food Assistance and Nutrition Research Report Number 34-12 July 2003
2 Economic Research Service / USDA

Importance of Child Nutrition Programs to Agriculture / FANRR-34-12

The table also distributes total farm-sector effects across

commodities. For example, in Case 1 school programs and

CACFP generate production of $602 million for dairy and

meat producers (combined) and $155 million for fruit and

vegetable producers. Two factors help explain why the

impact on dairy and meat producers is relatively high.

First, dairy and meat products account for 44 percent of

food purchases for school meals while fruit and vegetables

account for 24 percent. Second, dairy and meat products

have relatively high farm cost shares while the cost of

farm commodities account for a relatively small share of

the cost for processed fruits and vegetables, and processed

fruits and vegetables account for 75 percent to 80 percent

of all fruits and vegetables. 

Under Case 2 with 26 percent additionality for WIC, the

child nutrition programs increased farm production by

$1,470 million, or $435 million more than under Case 1.

Added farm jobs rise by nearly 4,000 to a total of 13,084.

WIC’s biggest impact is on dairy production ($224 million, over half of $435 million) because dairy accounts for

close to 60 percent of WIC food purchases either directly

or indirectly (through infant formula). WIC’s effect on

other crops is due primarily to feed grains.

Background and Methods: Table 2 reports that 2001

expenditures by child nutrition programs were $14,101

million, of which an estimated $7,784 million were for

food purchases assuming 48 percent of total school program expenditures were for food, including donated commodities (USDA-FNS, 1994). For WIC, food costs are

reported in the program data (USDA-FNS, October 2002).

Each program’s additional food expenditures are the product of food expenditures and a program’s additionality—a

measure of added food consumption generated by a program after netting food that would have been consumed

anyway. A review of the literature suggests an additionality

of 45 percent for NSLP, 73 percent for SBP, and zero for

WIC (Devaney and Fraker, 1989; USDA-FNS, 1987a,b).

Given an absence of studies for the other school programs,

we assign them the 0.45 percent additionality of the NSLP.

It was supposed that the Special Milk Program purchases

fluid milk only. Food item purchases by the other school

programs and CACFP were derived from the School Food

Purchases Study (USDA-FNS, 1998). WIC food expenditures were taken from the FY 2000 WIC Food Package

Cost Analysis (USDA-FNS, 2002).

Given the additional food purchases by the child nutrition

programs, we estimate the farm impacts in terms of production (cash receipts), value added and jobs. We assume

the food purchases are at wholesale prices, which are

lower than the retail prices households pay for the same

food items. The farm cost share for each food item is the

direct farm impact from the additional food demand. The

cost shares are derived from the input-output accounts.

Input-output analysis estimates the indirect impact on

farms, taking into account that the production of farm

commodities involves the use of other farm commodities,

e.g., feed grains are used in livestock and dairy production.

For more information on the use of the input-output analysis, see USDA-ERS Briefing Room: Food and Nutrition

Assistance Program and the General Economy.

Information Sources:

Devaney, Barbara, and Thomas Fraker. “The Effect of Food Stamps on

Food Expenditures: An Assessment of Findings from the Nationwide

Food Consumption Survey.” American Journal of Agricultural

Economics, 71(1), February 1989, 99-104.

USDA-ERS. “Briefing Room: Food and Nutrition Assistance Program

and the General Economy.” Available at: www.ers.usda.gov/Briefing/

GeneralEconomy/index.htm

USDA-FNS. “Program Data: Annual Summary.” October 2002.

Available at: www.fns.usda.gov/pd/annual.htm

USDA-FNS. “FY2000 WIC Food Package Cost Analysis.” 2002.

Available at: www.fns.usda.gov/oane/MENU/WICFoodCosts/

FY00Report.pdf

USDA-FNS. “School Food Purchases Study.” 1998. Available at:

www.fns.usda.gov/oane/MENU/Published/CNP/FILES/sfps-pt3.pdf

USDA-FNS. “School Lunch and Breakfast Cost Study, Summary of

Findings.” 1994. Available at: www.fns.usda.gov/oane/MENU/

Published/CNP/FILES/Lunch&BreakfastCostSum.pdf

USDA-FNS. “National WIC Evaluation.” Vol. 3, Ch. 7. 1987a.

USDA-FNS. “Impact of School Nutrition Programs on Household Food

Expenditures.” 1987b. 

Table 2. Child nutrition program additional food expenditures in 2001

Total cost1 Food cost2 Case 13 Case 24

---------------------------------------------$ million-----------------------------------------

Child Nutrition Programs 14,101 7,784 2,344 3,126

School Programs 8,213 3,942 1,969 1,969

National School Lunch Program (NSLP) 6,475 3,108 1.399 1,399

School Breakfast Program (SBP) 1,450 696 508 508

Summer Food Service Program (SFSP) 272 131 59 59

Special Milk Program (SMP) 16 7 3 3

Child/Adult Care Food Program (CACFP) 1,739 834 376 376

WIC 4,150 3,008 0 782

1Total program expenditures: USDA-FNS program data, www.fns.usda.gov/pd/annual.htm

2Food cost is the program expenditure on food purchases plus donated commodities, estimated.

3Additionality by program is: 0.45 for NSLP, SFSP, SMP, and CACFP, 0.733 for SEP, 0.0 for WIC.

426 percent additionally for WIC, plus the additionality for other programs from case 1.

The U.S. Department of Agriculture is an Equal Opportunity Provider and Employer