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Food is the third largest spending category for American households at 12.6 percent

Monday, December 11, 2017

The average American household spent a slightly larger percentage of its income on total food—grocery and restaurant purchases—in 2016 than in 2015. The increase from 12.5 percent of expenditures in 2015 to 12.6 percent in 2016, possibly reflects 2016’s 0.3-percent rise in total food prices, combined with the 2.1-percent decline in transportation costs. With a 12.6 percent share, food ranked third behind housing (33 percent) and transportation (15.8 percent) in a typical American household’s 2016 expenditures. Breaking down food spending further, 7.1 percent of expenditures were spent at the grocery store and 5.5 percent at restaurants. Looking at expenditure shares over time, food’s share has steadily declined since 1984 (the first year of available data), when food expenditures accounted for 15 percent of consumer spending. As the share for food has declined, the shares of income spent on housing, health care, and entertainment have increased from 1984. This chart is one of the 34 charts and maps that can be found in the ERS publication, Selected charts from Ag and Food Statistics: Charting the Essentials, October 2017.

Bringing pumpkin pie to Thanksgiving dinner? A homemade one will cost you $4.12 this year

Monday, November 20, 2017

Errata: On November 20, 2017, the text was corrected to reflect that butter, sugar, and pie pumpkins were more expensive in September 2017 compared to September 2016, and flour and egg prices were lower.


As the fourth Thursday in November approaches, some shoppers may wonder how food price inflation will affect the cost of their favorite dishes, including pumpkin pie. In fact, for many Americans, it might be hard to imagine a Thanksgiving feast without it. In September 2017, the ingredients for a pumpkin pie totaled $4.12, with pumpkin making up 65 percent of that cost and butter accounting for 15 percent. This same pie would have cost $3.24 to bake in September 2016. Flour and egg prices were lower in September 2017 compared to September 2016, while milk prices remained relatively flat. Butter, sugar, and pie pumpkins—smaller, rounder, and denser than carving pumpkins—were all more expensive in September 2017 compared to a year earlier. Additional savings could be found this November, as retail stores often offer specials on holiday baking staples. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated October 25, 2017.

A perk with today’s home-brewed coffee—it costs less than 30 years ago

Monday, September 25, 2017

Friday, September 29 is National Coffee Day, and according to a National Coffee Association survey, 62 percent of adult Americans are coffee drinkers—either brewed at home or purchased on the go or as part of a restaurant meal. For those waking up to the aroma of home-brewed coffee, they can also enjoy the fact that their cup of morning coffee costs less today than it did 30 years ago, when adjusted for inflation. In 2017, a 12-ounce cup of coffee costs, on average, 19.1 cents to brew at home. That same cup of coffee cost 12.2 cents in 1987. But when adjusted for inflation, that 12.2 cents is equivalent to 26.3 cents in 2017 dollars. For those who prefer their daily joe with milk and sugar, that adds 3.1 cents in 2017 compared with 4.5 cents in 1987 in 2017 dollars. Thus, the cost of a home-prepared cup of coffee has declined by just over a fourth over the past three decades. So, sit back and enjoy a second cup this Friday. More information on ERS’s food price data can be found in the Food Price Outlook data product, updated September 25, 2017.

Inflation in grocery store food prices varies across U.S. metropolitan areas

Friday, September 1, 2017

Increasing prices (inflation) for food sold in supermarkets, supercenters, convenience stores, and other retailers differ by U.S. metropolitan statistical areas (MSAs). For example, from 2007 to 2016, retail food prices rose 26.4 percent in Pittsburgh but only 12.8 percent in Anchorage. Several factors account for variations in food price inflation across MSAs. Changes to the costs associated with transporting food products to the grocery store can vary geographically, and volatile fuel prices can contribute to variation in retail food price inflation across MSAs. Fluctuations in retail overhead costs, such as labor and rent, may also differ from one area to another. Increases in retail overhead costs are often passed onto consumers as higher prices. However, in MSAs with falling consumer incomes, grocers may not be able to pass on price increases to budget-constrained consumers, dampening food price inflation. This chart appears in the ERS data product, Food Price Outlook, updated July 25, 2017.

Changes in farm commodity prices have a muted effect on grocery store and restaurant prices

Friday, July 21, 2017

Favorable weather conditions as well as droughts and floods can lead to changes in production levels of farm commodities and, in turn, swings in their prices. Volatility in farm commodity prices—measured by the Producer Price Index (PPI) for Farm Products—and in intermediate foods—measured by the PPI for Processed Foodstuff and Feedstuff—is often greater than price volatility in grocery stores and restaurants. Intermediate foods, such as vegetable oils and refined sugar, are used to produce final foods like cookies and bread. Prices at each stage generally move in the same direction, but the magnitude of the price changes varies. For instance, in 2016 the Farm Products PPI declined by 9.7 percent, the Processed Foodstuff and Feedstuff PPI fell by 2.7 percent, while the Consumer Price Index (CPI) for All Food (foods purchased in stores and eating places) rose, slightly, by 0.3 percent. Price fluctuations for intermediate foods and final foods are muted relative to that of farm products, since foods at later stages of production include less volatile costs for processing, transportation, packaging, and other wholesale and retail overhead costs. According to ERS’s Food Dollar Series, farm and agribusiness costs only represented 10.8 cents of every dollar spent on domestically-produced food in 2015. This chart is from ERS’s Food Price Outlook data product, updated July 3, 2017.

Food price inflation continues to outpace overall inflation

Monday, June 5, 2017

From 2012 to 2016, the Consumer Price Index (CPI) for all food (grocery store and restaurant food) rose by 6.1 percent—a larger increase than the 4.5-percent rise in the all-items CPI. When the CPI for a specific category, such as food, rises faster than the all-items CPI, it indicates that prices for the category are rising faster than prices for consumer goods and services as a whole. Livestock and crop diseases, major weather events, and shocks to global food markets have caused price inflation for food to outpace many other consumer spending categories. Only prices for medical care and housing rose faster than food prices during 2012-16. Food prices experienced larger increases than prices for recreation and education and communication, and apparel and transportation prices fell over 2012 to 2016. The 10.3-percent decline in transportation prices—a result of falling gasoline prices in 2015 and 2016—helped hold down economy-wide inflation. Food-price inflation outpacing economy-wide inflation is not a recent phenomenon. Over the last decade, food-price inflation averaged 2.4 percent per year and overall inflation averaged 1.8 percent per year. This chart appears in ERS’s data product, Ag and Food Statistics: Charting the Essentials.

Retail food prices in 2016 declined for the first time in nearly 50 years

Monday, March 27, 2017

In 2016, retail food prices decreased by 1.3 percent—the first time since 1967 that grocery store (food-at-home) prices were lower than those in the year before. Over the last 50 years, food-at-home prices have, on average, risen 4 percent annually. However, year-to-year price changes have varied over time. High food price inflation in the 1970s—price increases as large as 16.4 and 14.9 percent in 1973 and 1974—was precipitated by food commodity and energy price shocks, whereas food price increases were minimal in 2009 and 2010, as the 2007-09 recession put downward pressure on prices for many goods, including food. The unusual decline in retail food prices in 2016 can be attributed to a culmination of factors. Declining prices for retail meats, eggs, and dairy during that year are largely a story about rising commodity production. Lower transportation costs due to low oil prices and the strength of the U.S. dollar also placed downward pressure on food prices in the first half of 2016. This chart appears in “Consumers Paid Less for Grocery Store Foods in 2016 Than in 2015” in the March 2017 issue of ERS’s Amber Waves magazine.

Baking supplies cost less in 2016 than in 2015

Friday, December 16, 2016

This holiday season, consumers buying baking ingredients will find their wallets stretch a bit farther. The total cost in 2016 for five baking staples—eggs, milk, margarine, sugar, and flour—was down from 2015. A 5-pound bag of flour, 4-pound bag of sugar, gallon of whole milk, pound of margarine, and a carton of eggs would have cost $13.30 in October of 2015 compared to $11.65 in October of 2016—a savings of $1.65. Consumers may notice the biggest savings when they reach into the refrigerated cooler for eggs. Egg prices have been halved, declining year-over-year by $1.42 per dozen as the egg industry recovers from last year’s Highly Pathogenic Avian Influenza outbreak. Price changes for the other categories are smaller and vary depending on the ingredient. Milk, sugar, and margarine cost less this year, while a 5-pound bag of flour cost 6 cents more than last year. More information on retail food prices and forecasted inflation can be found in ERS’s Food Price Outlook data product, updated November 23, 2016.

Grocery store prices lower in the third quarter of 2016 from a year ago

Tuesday, December 6, 2016

The food-at-home Consumer Price Index (CPI) for the third quarter of 2016 was 1.9 percent lower than the food-at-home CPI for the third quarter of 2015. Grocery store prices decreased, on average, across the board—with the exception of fresh fruits, which rose 2 percent. Egg prices saw the largest decrease, falling 35 percent, reflecting the recovery in the industry after the supply shock caused by late 2014 to June 2015 Highly Pathogenic Avian Influenza outbreak. Beef and veal, dairy products, pork, and poultry also posted large decreases compared to third quarter 2015, reflecting larger supplies of cattle, raw milk, hogs, and broilers. In addition to increases in domestic supplies, lower oil and energy prices helped hold down retail food price inflation, while a strong U.S. dollar lowered costs for imported foods and decreased demand for U.S. exports, placing further downward pressure on U.S. retail food prices. This chart appears in the Food Prices and Spending section of ERS’s Ag and Food Statistics: Charting the Essentials chart collection. More information on retail food prices and forecasted inflation can be found in ERS’s Food Price Outlook data product, updated November 23, 2016.

Lower ground beef prices reduce cost of home-grilled cheeseburgers by just over 6 percent from a year ago

Thursday, June 30, 2016

If cheeseburgers are on the menu for your July 4 barbecue, they will cost you less this year than last year. Thanks to lower prices for ground beef, bread, and tomatoes, the cost of a home-prepared cheeseburger was 6.3 percent lower in May 2016 compared with May 2015. In May 2016 (latest available prices), the ingredients for a quarter-pound cheeseburger totaled $1.72 per burger, with ground beef making up the largest cost at $0.93 and cheddar cheese accounting for $0.34. This same cheeseburger would have cost $1.83 to prepare in May 2015. Ground beef prices decreased 10.1 percent between May 2015 and May 2016, translating to a $0.10 per quarter-pound savings. Bread and tomato prices also decreased, bread prices fell 5.5 percent and tomato prices 2.6 percent. Cheddar cheese prices increased 1 percent from last May. Lettuce prices, on the other hand, were up 3.2 percent, but due the small piece of lettuce topping the cheeseburger, this translated into an increase of less than a cent per burger. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated June 24, 2016.

Food price inflation varies across U.S. metropolitan areas

Thursday, May 26, 2016

U.S. metropolitan statistical areas (MSAs) experience different rates of inflation for food sold in supermarkets, supercenters, convenience stores, and other retailers. For example, from 2006 to 2015, retail food prices rose 34.4 percent in Pittsburgh but only 17.4 percent in Detroit. Several factors account for variations in food price inflation across MSAs. Changes to the costs associated with transporting food products to the grocery store can also vary geographically, and volatile fuel prices can contribute to variation in retail food price inflation across MSAs. Fluctuations in retail overhead costs, such as labor and rent, may also differ from one area to another. Increases in retail overhead costs are often passed onto consumers as higher prices. However, in MSAs with falling consumer incomes, grocers may not be able to pass on price increases to budget-constrained consumers, dampening food price inflation. This chart appears in “Retail Food Price Inflation Varies Geographically” in the May 2016 issue of ERS’s Amber Waves magazine.

Swings in field crop prices have relatively small impacts on food prices

Monday, May 9, 2016

U.S. commodity prices are much more volatile than restaurant and grocery-store prices, suggesting that fluctuations in prices of major field crops—corn, wheat, and soybeans—have a relatively small impact on food prices. From 1992 to 2015, the average farm price of these crops, weighted by total production, has fluctuated widely year to year—falling as much as 26.2 percent in 2013 and rising as much as 38 percent in 1995 and 2007. All-food price inflation, on the other hand, averaged 2.5 percent per year over the same time period. One reason for the relative stability in food prices, as compared to field crop prices, is that food prices reflect the costs of processing, marketing, and retailing the food products in addition to the cost of the commodity inputs. ERS's 2014 Food Dollar Series reports that the farmgate price of all food commodities (crops and livestock) was 14.5 cents of every consumer dollar spent on food and beverages. This chart appears in Ag and Food Statistics: Charting the Essentials on the ERS website, updated April 12, 2016.

Retail price forecasts for 2016 vary by food category

Monday, April 11, 2016

Grocery store food prices are forecast to rise between 1.5 and 2.5 percent in 2016, exceeding the 2015 increase of 1.2 percent, with some variation across food categories. Egg prices are expected to fall between 0.5 and 1.5 percent as the egg industry recovers from the highly pathogenic avian influenza (HPAI) outbreak, which reduced the supply of eggs in the U.S. market and drove retail egg prices up by 17.8 percent in 2015. Retail beef and veal prices will also likely decline in 2016, dropping up to 1 percent below 2015 levels. Like eggs, beef, and veal prices experienced higher than average inflation in 2015, but as producers expand their herds, more cattle will be ready for market in 2016. On the other hand, prices for pork and dairy products, which experienced deflation in 2015, are expected to increase up to 1 percent, and 2 to 3 percent, respectively. As the drought continues throughout much of California, ERS forecasts prices for fresh fruits and vegetables to rise between 2.5 and 3.5 percent. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated March 25, 2016.

2016 food price inflation expected to exceed 2015

Thursday, February 25, 2016

Over the last decade, retail food price inflation in the United States has bounced around a bit, with yearly price increases ranging from 0.3 to 6.4 percent. In 2007 and 2008, grocery store prices rose 4.2 and 6.4 percent, respectively—well above the 20-year annual average increase of 2.6 percent. Inflation during these years was largely due to a rapid increase in farm-level prices for rice, grains, and oilseeds. The low inflation in 2009 (0.5 percent) and 2010 (0.3 percent) reflected the Great Recession’s downward pressure on retail food price inflation. Prices again rose above average in 2011 as grocery prices adjusted post-recession. From 2012 through 2015, food price inflation varied, but stayed below average. Despite high egg and beef prices in 2015, food price inflation, at 1.2 percent, was less than 2014’s 2.4-percent rise. Lower pork, fresh fruit, and fats/oils prices helped ease overall food price inflation in 2015. In 2016, ERS expects retail food prices to increase between 2 and 3 percent, with some variation among grocery subcategories. For instance, fresh fruit prices are expected to rise 2.5 to 3.5 percent in 2016, while egg prices are expected to decrease between 0.5 and 1.5 percent. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated February 25, 2016.

Retail egg prices rose 21 percent in third quarter 2015

Monday, February 8, 2016

Egg prices are among the most volatile in the grocery store. Unlike many other retail foods, shell eggs have a limited shelf life—they cannot be frozen or canned. If demand increases or supplies fall, there is limited inventory to draw upon and retail prices may rise. While some price fluctuations are expected due to seasonal demand for eggs throughout the year, there have been some above-average price increases over the past 16 years, mainly due to disease outbreaks affecting poultry or surges in feed prices. The most recent upswing in retail egg prices was largely due to an outbreak of highly pathogenic avian influenza (HPAI), which affected table-egg-laying flocks, primarily in the Midwest. To contain the outbreak, which ran from late 2014 to June 2015, producers destroyed about 33 million hens (roughly 11 percent of U.S. egg-laying hens). Retail egg prices rose 20.9 percent in the third quarter of 2015, and egg prices in September 2015, were 36.2 percent higher than in September 2014. As the industry recovers from the outbreak, retail egg prices have begun to adjust, falling 3.3 percent in the fourth quarter of 2015. This chart appears in “Retail Egg Price Volatility in 2015 Reflects Farm Conditions” in the February 2016 issue of ERS’s Amber Waves magazine.

Ingredient costs for an apple pie up 3.1 percent from October 2014

Wednesday, November 25, 2015

U.S. net farm income—a measure of the sector’s profitability—is forecast to be $55.9 billion in 2015, down 38 percent from 2014’s estimate of $90.4 billion. If realized, the 2015 forecast for net farm income would be the lowest since 2002 (in both real and nominal terms) and a drop of 55 percent from the recent high of $123.3 billion in 2013. Lower crop receipts (declining by $18.2 billion) and livestock receipts (declining by $25.4 billion) are the main drivers of the change, as total production expenses are projected down by 2 percent ($7.7 billion) and government payments are forecast to increase about 10 percent ($1.0 billion) in 2015. Net cash income is forecast at $93.0 billion, down about 28 percent from the 2014 estimate. Net cash income is projected to decline less than net farm income primarily because it reflects the sale of carryover stocks from 2014. This chart is found in 2015 Farm Sector Income Forecast, released November 24, 2015.

Inflation-adjusted prices for a few food categories have fallen since 1985

Tuesday, July 21, 2015

Over the past 30 years, grocery store prices have risen 4.5 percent above economy-wide prices, indicating that food prices have risen faster than some other consumer goods, such as housing and transportation. Inflation-adjusted (real) prices for poultry and dairy products have been stable, while real prices for red meats, eggs, and fresh fruits and vegetables grew by 18, 21.5, and 40 percent between 1985 and 2014, respectively. Over the same time period, real prices for fats and oils, sugar and sweets, and nonalcoholic beverages fell. A main ingredient in many nonalcoholic beverages is corn sweeteners, which have decreased in price nearly 20 percent since 1985. Processed foods, many of which are included in the sugar and sweets category, are less affected by commodity-level price swings and are generally more closely linked to the costs of inputs such as electricity and wages. Industrial electricity costs and manufacturing wages both increased at a rate about 10 percent lower than overall inflation since 1985. This chart appears in “Growth in Inflation-Adjusted Food Prices Varies by Food Category” in ERS’s July 2015 Amber Waves magazine.

Retail pork and chicken prices down from a year ago, beef prices higher

Thursday, July 2, 2015

When shopping at the meat counter this Fourth of July, consumers may notice differences in prices per pound compared to last year. A pound of pork chops sold for $3.79 in May 2015 compared to $4.11 per pound in May 2014, a decrease of 7.8 percent. The price of boneless chicken breasts has also fallen, decreasing by 1.9 percent over the last year to $3.41 per pound. In contrast, beef prices are up this year, largely due to drought conditions throughout the Southern Plains and Southwest. Higher feed costs and decreased water supplies forced farmers to shrink their herd sizes to historically low levels in 2014, causing beef prices to rise by more than 10 percent over the last year. On average, consumers are paying $0.28 more per pound for ground beef and $1.23 more per pound for sirloin steak in May 2015 compared to a year earlier. Information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product.

California drought continues, but produce inflation expected to be near historical average

Monday, April 20, 2015

The California drought continues into 2015—as of March, 42 percent of the State is classified under the exceptional drought rating. Despite these conditions, U.S. fresh fruit and vegetable price inflation is expected to be close to its historical average in 2015. ERS predicts fresh fruit prices will increase 2.5 to 3.5 percent and fresh vegetable prices 2.0 to 3.0 percent. While California does grow a large percentage of many U.S. fresh fruits and vegetables, portions of the produce purchased in grocery stores are imported from various foreign markets. Currently, the strong U.S. dollar is making foreign produce relatively less expensive, putting downward pressure on U.S. retail produce prices. Commodities that are grown almost entirely in California and whose supplies are not largely supplemented by imports could begin to experience higher price increases in 2015. This chart appears in the Food Prices and Consumers section of the California Drought: Farm and Food Impacts page on the ERS website. Information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product.

Retail food prices up 3.5 percent at the end of 2014

Friday, March 27, 2015

Grocery store food prices in the fourth quarter of 2014 were 3.5 percent higher than a year earlier. At-home food price inflation over the last 20 years has averaged around 2.6 percent per year, indicating that 2014 ended the year with higher than average food price inflation. Beef and veal prices saw the largest increase, rising 18.2 percent from the fourth quarter of 2013, the result of historically low U.S. herd sizes and steady consumer demand. Pork prices were up 9.3 percent, as Porcine Epidemic Diarrhea virus (PEDv) in the United States affected the supply of hogs available for market. However, some food categories saw price increases over the same time period that were lower than average. Retail prices for cereals and bakery products rose just 0.4 percent, and fats and oils rose 1.5 percent. The relatively low rate of inflation for these two categories was predominantly due to large supplies of soybeans and wheat from strong U.S. production. This chart is from ERS’s data product, Ag and Food Statistics: Charting the Essentials, updated March 23, 2015. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated March 27, 2015.

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