The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) is one of the

central components of the Nation’s food and nutrition assistance programs. With Federal expenditures of

$5.5 billion in fiscal 2007—or almost 10 percent of total Federal Government expenditures for food and

nutrition assistance—WIC is the third largest food assistance program, trailing only the Supplemental

Nutrition Assistance Program (SNAP, formerly the Food Stamp Program) and the National School Lunch

Program (USDA, 2008). WIC serves over 8 million participants per month, including almost half of all

infants and a quarter of all children ages 1-4 in the United States. 

WIC provides program participants with supplemental food, as well as nutrition education and referrals

to health care and other social services. WIC is based on the premise that early intervention programs

during critical times of growth and development in a child’s life can help prevent future medical and

developmental problems. WIC also has economic ramifications that extend beyond program recipients.

To the extent that WIC increases total food expenditures, WIC also affects the country’s farm sector. 

This report estimates the revenues that farmers derive from sales of WIC foods and the number of farm

jobs needed to produce these foods. It updates the analysis reported in Hanson (2003) by taking into

account the 2007 revisions in the types and amounts of food provided in the WIC food packages. 
ECONOMIC BRIEF Economic Linkages Between the WIC Program and the Farm Sector

WIC Food Packages Are Revised

Participants in WIC receive one of seven food packages, depending on their recipient category

(infants 0 through 3 months; infants 4 through 12 months, children 1 to 5 years; pregnant and 

breastfeeding women, nonbreastfeeding postpartum women, breastfeeding women-enhanced, and

children/women with special dietary needs). The foods included in the packages are high in nutrients

that have been determined by nutritional research to be lacking in the diets of the population served

by the program (7 CFR 246.2). A lack of these nutrients may result in adverse health consequences. 

Before 2008, WIC food packages included combinations of the following foods: iron-fortified infant

formula; iron-fortified cereal (infant and adult); vitamin C-rich fruit juice and/or vegetable juice;

eggs; milk; cheese; peanut butter, dried beans, or peas; tuna fish; and carrots. In December 2007,

program regulations were revised to better reflect advances in nutrition science and dietary 

recommendations and to better address current supplemental nutritional needs of WIC participants

(72 Federal Register 68965-69032) (see box, “Summary of Major Revisions to WIC Food 

Packages”). Reductions in the maximum monthly allowances for some foods (e.g., milk, cheese,

juice, and eggs) and the addition of new groups (e.g., fruits and vegetables and some whole grain

products) are anticipated to improve the nutrition and health of the program’s target population.

Allowing more flexibility in food selection (e.g., soy-based beverages and tofu as alternatives to milk

in the women’s packages) should also provide greater incentives for families to participate in WIC

and consume the prescribed foods. The new food packages were designed to be cost-neutral—that is,

to cost no more than the packages they replaced. WIC State agencies are required to implement the

new provisions between February 4, 2008, and October 1, 2009. 

Addition of fruits and vegetables (as commercial baby foods for older infants and as

cash-value vouchers for children and women). 

More whole grain foods—at least half of the cereals in a State’s list of approved WIC foods

must be whole grain, and new whole grain products are allowed, including breads, brown

rice, tortillas, and bulgur. 

Addition of baby food meats for fully breastfed older infants.

Greater variety of choices, such as soy beverages and tofu, as substitutes for milk for

women. 

Less milk, cheese, eggs, and juice. New constraints on choices include reduced amount of

cheese that may be substituted for fluid milk; no whole milk, except for 1-year-old children

or children with medical documentation for other participant categories; no juice for infants.

Delayed provision of complementary infant foods for children ages 4-6 months (only infant

formula will be provided until the infant is 6 months old).

Less infant formula for partially breastfed infants and for older infants (6-11 months), 

more infant formula for fully formula-fed infants ages 4-5 months (to compensate for the 

elimination of complementary infant foods for this age group). 

Summary of Major Revisions to WIC Food Packages
Economic Linkages Between the WIC Program and the Farm Sector

Most States distribute WIC foods to participants via a retail

food delivery system. Under this system, WIC provides

participants with food instruments—in the form of a voucher,

check, or Electronic Benefit Transfer (EBT) card—which

specify the types and quantities of foods the participants may

obtain. WIC participants then exchange the food instruments

for WIC foods at over 44,000 approved retail vendors

(usually grocery stores or supermarkets) across the country.

WIC State agencies reimburse the vendors for the foods

purchased with the food instruments. 

$1.3 Billion in Farm Revenues 

Are Linked to WIC Foods

Although States have until October 1, 2009, to implement the

revised food packages, this analysis assumes that the 

revisions in the WIC food packages were implemented in all

States in fiscal 2008. We estimated retail sales of food in the

revised WIC food packages to be $4.6 billion after rebates in

fiscal 2008 (see box, “How Was the Study Conducted?”).

WIC sales by food item—based on the revised WIC food packages—are shown

in figure 1. Even with the reductions in milk associated with the revised WIC

food packages, milk has the largest sales—$978 million. About two-thirds (67

percent) of all WIC food sales are accounted for by milk (21 percent), infant

formula (19 percent, measured on a post-rebate basis), breakfast cereal 

(13 percent), and fruits and vegetables (13 percent). 

Our analysis indicates that farmers receive almost $1.3 billion from the sale of

commodities that are used in producing the $4.6 billion in WIC retail food sales.

A food’s path from its raw form at the farm to a finished product in a WIC

household may take various routes with few or many stops along the way. 

WIC foods that undergo minimal processing, such as eggs and fresh fruits and 

vegetables, which essentially go from the farm through the wholesale trade and

transportation system to retail vendors, account for $289 million (23 percent) of

farm revenues realized from the sale of WIC foods (fig. 2). The largest share of

farm revenue ($585 million, or 46 percent) is from farm commodities that

undergo one stage of processing into WIC foods—for example, raw milk from

the farm processed into the milk we drink. WIC foods that involve two stages of

processing—for example, wheat and other grains processed by the miller and

ultimately made into whole grain bread or breakfast cereal—contribute $149

million of farm revenue (12 percent). 

In addition to farm commodities used by food processors to produce WIC foods, the production of

these farm commodities may also involve the use of other farm commodities. Examples include feed

for dairy cows and poultry (whether in the form of raw grains and hay or processed grains) and seed

for grain production. These farm commodities account for $177 million (14 percent) of farm revenue. 

The remaining $75 million (6 percent) in farm revenue are from other uses of farm commodities in the

production of WIC foods that are not accounted for above. 

Figure 2

Estimated revenue from the sale of farm

commodities used in the production of 

WIC foods

$ million

Retail

26%

WIC food with

two-stages

of processing,

$149

Farm use in farm

production,

$177

Other uses,

$75

Note: In 2008 dollars.

Source: ERS calculations.

WIC foods 

with one-stage of

processing

$585

WIC foods

with no

processing,

$289

Figure 1

Estimated WIC sales by food item based on revised food

packages, 2008

0 200 400 600 800 1,000

Tofu

Canned fish

Rice

Soy beverage

Peanut butter

Eggs

Beans

Bread

Baby food

Cheese

Fruit and vegetable juice

Fruit and vegetables

Breakfast cereal

Infant formula (post-rebate)

Milk

$ million

Source: ERS calculations. 

Note: Estimated post-rebate WIC sales in 2008 sum to $4.6 billion. 
Economic Linkages Between the WIC Program and the Farm Sector ECONOMIC BRIEF

Of the estimated $1.3 billion in total farm revenue from WIC food sales, livestock and crop farms

receive $707 million and $567 million, respectively (table 1). Dairy farms receive the most revenues

at $569 million (45 percent), fruits and vegetables are second with $292 million (23 percent), and

grains are third with $171 million (13 percent).

WIC Generates a Net Gain of $331 Million 

in Farm Revenues From Increased Food Spending

The estimate of $1.3 billion in farm revenue generated from the sale of WIC foods does not represent

the net impact of WIC on the farm sector because many of the foods purchased through WIC would

have been purchased by WIC participants even in the absence of the program. That is, without the

program, the people now participating in WIC would have purchased some of these foods with their

own money. Stated another way, although participants who receive a dollar of benefits from a

program are likely to spend the entire dollar on food, at the same time, they are reducing the amount

they spend on food from their own cash income. As a result, the increase in food expenditures

resulting from a food assistance program will be some fraction of the total dollar amount of 

benefits provided.

The first stage of the analysis involved estimating the total dollar sales of WIC foods in fiscal 2008. At the time of this analysis,

data on the sale of WIC foods was available for only the first 8 months of 2008. Therefore, a linear trend from October 2006 through

May 2008 was used to estimate the remaining 4 months of WIC sales in fiscal 2008. The result is an estimate of $4.6 billion in WIC

sales after rebates (WIC receives about $1.7 billion in rebates from infant formula manufacturers for the infant formula purchased

through the program). Given the assumption of cost neutrality of the revised WIC food packages, the fiscal 2008 estimate of 

WIC food sales based on the revised WIC food packages is assumed to be the same as the estimated sales based on the old 

WIC food packages.

Stage two of this analysis involved distributing the $4.6 billion of total WIC sales across the individual foods contained in the

revised WIC food packages (although States have until October 1, 2009, to implement the revised food packages, we assume for

this analysis that the revisions in the WIC food packages were implemented in all States in fiscal 2008). The basis for our estimate

of WIC food sales is the estimates developed by USDA’s Food and Nutrition Service (Federal Register 72:234, December 6, 2007,

table 18, p. 69029). FNS estimated sales of the foods contained in the revised WIC food packages based on 2005 cost data. Because

the FNS estimates reflected pre-rebate sales, we subtracted out rebates for infant formula and then proportionately adjusted the 

estimates for each food item to derive a total estimate of post-rebate WIC food sales for fiscal 2008. The estimates of WIC sales

shown in figure 1 reflect these adjustments. 

In the third and last stage of this analysis, an Input-Output Multiplier Model developed by ERS was used to estimate revenues

received by the various sectors and derive farm revenue (and farm jobs) linked to the WIC food package sales. The model is based

on the 2002 Benchmark Input-Output Account published by the U.S. Department of Commerce, Bureau of Economic Analysis

(2007). The account provides information on the dollar value of commodities used by industry as inputs into production, as well as

their use in final demand by consumers. The account consists of over 400 industries and commodities, including 14 in farming and

about 30 in food processing. For the analysis of the farm revenue linked to the WIC food package, we treated farm revenue as the

value of production (output) in the farm sectors. Farm revenue directly linked to processed foods in the WIC food package were

derived from the input-output coefficients, after taking into account trade and transportation margins. The Input-Output Multiplier

Model estimates the indirect farm revenue associated with the WIC food package. For analysis of 2008 WIC food package sales

with a model based on 2002 data, we deflated the WIC food sales from 2008 to 2002 dollars using the Consumer Price Index (CPI)

for food at home, and then we inflated model results from 2002 to 2008 dollars.

How Was the Study Conducted?
ECONOMIC BRIEF Economic Linkages Between the WIC Program and the Farm Sector

Thus, the net impact of WIC on the farm sector depends

largely on the program’s additionality (that is, the amount by

which a dollar of program spending results in additional food

spending). If WIC’s additionality is zero—that is, if all foods

purchased with WIC vouchers would have otherwise been

purchased with the participants’ own funds—then WIC would

have little overall impact on the farm sector. Any effect from

WIC on agriculture would be due to a different mix of foods

being purchased (for example, more milk and juice and fewer

other beverages) rather than from a difference in the total

amount of food purchased. On the other hand, additionality

occurs if participation in WIC results in participants

purchasing more food (that is, spending more money on food)

than they would otherwise in the absence of the program. The

degree to which WIC results in additionality is not known. A

comprehensive literature review of USDA’s food and nutrition

assistance programs’ impact on participants’ health concluded

that, because of data and methodological issues associated

with previous empirical research, it is difficult to draw conclusions about WIC’s impact on household expenditures for food 

(Fox et al., 2004). 

In light of the lack of a widely accepted estimate of WIC’s

additionality, we assume that the economic behaviors by WIC

participants resemble those of SNAP recipients. A number of

studies have found that SNAP increases participants’ food

purchases (Fox et al., 2004). After reviewing the literature on

the additionality associated with SNAP, we chose to use an

additionality value of 26 percent based on a study by Levedahl

(1995). This estimate is a conservative value among the values

cited by Fox et al. (2004), which ranged from 17 percent to 69

percent. Thus, we assumed that the WIC program increases

WIC participants’ food expenditures by 26 percent of the

value of the WIC food package. Under this scenario, we estimated that the net addition to retail food sales due to the WIC

program (i.e., sales beyond that which would have been

purchased if there were no WIC program) in fiscal 2008 was

$1.196 million (26 percent of the $4.6 billion of WIC retail

food sales). The net addition to farmers’ revenues was $331

million (table 1). Of this $331 million, $184 million went to

livestock farms—predominantly dairy farms—and $147

million went to crop farms—mostly fruit and vegetable farms. 

Table 1

Farm revenue from WIC food sales by type of farm, 2008

Farm revenue

$ million

From producing 

Type of farm WIC foods

Net increase due to

additionality1

Note: Based on the revised WIC food packages.

 Based on an additionality value of 0.26. Additionality is the amount by 

which a dollar of program spending results in additional food spending.

Source: ERS calculations.

All farms

Type of farm:

 Livestock

 Dairy

 Poultry and eggs

 Meat animals

 Crops

 Grains

 Fruit and vegetables

 Other crops

1,274.2

707.3

568.9

92.8

55.6

566.9

171.2

292.2

103.4

331.3

183.9

147.9

21.5

14.5

147.4

44.5

76.0

26.9

1

Table 2

Farm jobs required to produce WIC foods, 2008

Farm revenue

Number

To produce 

Type of farm WIC foods

Net increase due to

additionality1

2

 Based on an additionality value of 0.26. Additionality is the amount by 

which a dollar of program spending results in additional food spending.

 Full-time-equivalent jobs.

Source: ERS calculations.

1

2

Total farm jobs

Type of farm:

 Livestock

 Dairy

 Poultry and eggs

 Meat animals

 Crops

 Grains

 Fruit and vegetables

 Other crops

10,155

5,149

4,101

214

834

5,006

1,573

2,563

871

2,640

1,339

1,066

56

217

1,302

409

666

226
Economic Linkages Between the WIC Program and the Farm Sector ECONOMIC BRIEF

WIC Affects the Number of Farm Jobs 

This analysis also examined the amount of labor—as measured by number of jobs on U.S. farms—

needed to produce WIC foods, regardless of whether the work is performed by hired farmworkers,

self-employed farm operators, or unpaid family members. Because of differences in the seasonality

of farm jobs by type of farm (e.g., jobs on dairy farms are often year-round, while jobs on fruit and

vegetable farms are often seasonal) and because many farm jobs are only part-time, our estimates of

farm jobs are reported in terms of full-time equivalents. 

To produce the $4.6 billion in WIC retail food sales, an estimated 10,155 full-time-equivalent farm

jobs were required (table 2). These jobs are almost evenly split between livestock and crop 

production. Once again assuming an additionality of 26 percent for WIC, the program resulted in a

net addition of 2,640 full-time equivalent farm jobs during the year. Dairy accounted for 40 percent

of the total increase in jobs, whereas fruits and vegetables accounted for another 25 percent. 

The number of farm jobs associated with the production of WIC foods, either with or without the

additionality adjustment, is relatively small, due partly to the efficiency of U.S. agriculture. Increased

mechanization and other technological advances have greatly reduced the labor input per unit of

output on U.S. farms over time. Because of the seasonal nature of agriculture, many farmworkers do

not work year round in agriculture. Consequently, the number of full-time-equivalent farm jobs

reported here may underestimate the actual total number of full-time plus part-time farmworkers

involved in producing WIC foods. 

WIC May Affect Nonfarm Sector Also 

This study estimates that the $4.6 billion of food purchased with WIC vouchers in fiscal 2008 

generated $1.3 billion in farm revenue, based on the assumption that the recent revisions in the WIC

food packages were implemented in all States in fiscal 2008. Given that WIC participants would have

purchased some of these foods with their own money in the absence of the program, we estimated

that the net addition to farm revenue from WIC was $331 million and the net increase in full-timeequivalent farm jobs was 2,640. Note that WIC may also impact the nonfarm sector if funds that WIC

participants normally would have spent out of pocket for food are spent on nonfood items instead.

Fox, M., W. Hamilton, and B. Lin. Effects of Food Assistance and Nutrition Programs on 

Nutrition and Health: Volume 3, Literature Review, Food Assistance and Nutrition Research

Report No. 19-3, USDA, ERS, October 2004.

Hanson, K. Food Assistance Research Brief—Importance of Child Nutrition Programs to 

Agriculture, Food Assistance and Nutrition Research Report No. 34-12, USDA, ERS, July 2003.

Levedahl, J. “A Theoretical and Empirical Evaluation of the Functional Forms Used to 

Estimate the Food Expenditure Equation of Food Stamp Recipients,” American Journal of

Agricultural Economics 77(4):960-68, November 1995. 

U.S. Department of Agriculture, Food and Nutrition Service, Program Information Report

(Keydata), U.S. Summary, FY 2007-FY 2008 (through May 2008), July 2008. 

U.S. Department of Commerce, Bureau of Economic Analysis. “U.S. Benchmark 

Input-Output Accounts, 2002,” Survey of Current Business 87(10):19-48, October 2007. 

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