Trends in USDA Procurement of U.S. Food and Agricultural Products

The U.S. government is a significant buyer of food and agricultural products. In FY2023, the U.S. government spent $7.7 billion on food and agricultural products across several federal agencies (including purchases using supplemental funding). Of this total federal spending, the U.S. Department of Agriculture (USDA) accounted for the majority of purchases of food and agricultural products, totaling roughly $5.0 billion. The U.S. Department of Defense was the second-largest federal purchaser of food and agricultural products ($2.4 billion). Other federal agencies accounted for the remainder. Federal purchases of food and agricultural products vary from year to year, depending on need and economic circumstances. Purchases were higher in FY2020 than in FY2023, totaling nearly $12 billion, with nearly $10 billion purchased by USDA (in 2023 dollars, adjusted for inflation). Additional supplemental purchases were due to COVID-19 pandemic recovery efforts that Congress funded through supplemental appropriations as well as to various executive branch initiatives during both the Trump and Biden Administrations. Multiple federal authorities provide and/or authorize funding to procure food and agricultural products across a mix of both direct (mandatory) and discretionary appropriations. Spending authorities include program-authorizing statutes (usually for entitlement purchases), various USDA accounts and authorities (often for bonus purchases based on market conditions), and emergency and disaster authorities. As the U.S. government’s leading buyer of food and agricultural products and provider of nutrition assistance programs, USDA purchases a variety of fresh and processed commodity food products, covering more than 300 types of food, including meat, poultry, and fish and seafood products; milk and dairy products; fruits, vegetables, and tree nuts; grains and cereals; and other crops, such as peanuts and oilseeds. Between FY2012 and FY2018, the proportion that USDA spent on each product category had remained relatively constant, with meat and dairy products accounting for most federal purchases (roughly 60% on average). Since FY2019, USDA purchases of animal products as a share of all federal purchases have decreased, while USDA purchases of fruits, vegetables, and tree nuts have increased and comprise a growing share of total purchases, accounting for roughly 50% of federal purchases. In part, this increase is attributable to supplemental funding, particularly under a COVID-19 pandemic-era program that expanded purchases of fruits and vegetables in addition to proteins. Fish and seafood also comprise a growing share of USDA purchases. USDA’s Agricultural Marketing Service (AMS) administers the purchasing of U.S. food and agricultural products, including approving vendors, issuing solicitations, making awards, and orchestrating deliveries. AMS also coordinates the distribution of food and agricultural products through a wide range of domestic and international food assistance programs. USDA purchases for U.S. domestic food assistance programs, mostly administered by USDA’s Food and Nutrition Service (FNS), totaled $3.3 billion in FY2023, accounting for the majority of total FY2023 USDA purchases ($5 billion). FNS programs are largely designed to support supplemental nutrition for lower-income Americans. FNS programs are also used to distribute USDA-procured foods in response to domestic emergencies and disasters. USDA purchases for U.S. international food aid programs administered by USDA’s Foreign Agricultural Service and the U.S. Agency for International Development totaled $0.7 billion in FY2023. The United States is one of the largest donors of food globally, supporting international food assistance programs that donate food and agricultural products for economic development activities or emergency needs. Supplemental funding for USDA for food and agricultural products purchases totaled $1 billion in FY2023. In addition to supporting domestic and international food assistance programs, USDA purchases food and agricultural products in an effort to increase demand and stabilize U.S. agricultural markets and prices, in some cases through contingency purchases (also known as emergency surplus removals or bonus buys). USDA purchases food and agricultural products from a variety of vendors, including wholesalers, processors, producers, cooperatives, distributors, and other intermediary entities. Vendors may include individual producers that grow, harvest, and/or package food and agricultural products—such as farms, ranches, and fisheries. USDA also participates in several government-wide programs intended to create opportunities for small and socially disadvantaged businesses. USDA purchases must be of 100% domestic origin with limited exceptions.