ABSTRACT
While the structure and behavior of the domestic food processing and retailing system has been subject to detailed analysis over the past two decades (see Connor et al. 1985; Marion 1986), until recently, economic analysis of international markets for processed agricultural products, manufactured foods, and other high-value products has received very little attention in the agricultural economics literature. Most economic analysis of international markets has focused on basic agricultural commodities, which accounted for about 45 percent of the value of total U.S. food and agricultural trade in 1992 (MacDonald and Lee 1994). World food trade has become increasingly dominated by the manufactured foods sector, however. Between 1972 and 1990, the value of trade in manufactured food products grew by 442 percent, compared to growth in the value of bulk commodity trade of 337 percent, such that manufactured food trade now accounts for 64 percent of world food trade (United Nations 1990). Trade in manufactured foods is also highly concentrated among a few countries, with 24 countries accounting for 80 percent of shipments in 1990 (United Nations 1990). For the U.S., the third largest supplier of manufactured foods, exports of manufactured foods accounted for about 55 percent of total U.S. food trade in 1992 (MacDonald and Lee 1994), and for some European countries, the share of manufactured foods in total food trade is even greater, equaling 68,74, 82 and 81 percent respectively in France, the Netherlands, Germany, and the UK (United Nations 1990).
