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Farm share of retail price for Cheddar cheese down in 2018

Wednesday, August 14, 2019

In 2018, the farm share of the retail price of Cheddar cheese—the ratio of what dairy farmers received for the milk used in the cheese (farm value) to what consumers paid in grocery stores (retail price)—decreased to 28 percent from 32 percent in 2017. Although the average retail price of Cheddar cheese increased from $4.90 per pound in 2017 to $5.14 in 2018, the farm value of the 10.3 pounds (1.2 gallons) of milk used to make a pound of Cheddar cheese fell from $1.54 to $1.43 after adjusting for the value of the whey coproduct. During 2015-18, cheese supplies (sum of production, beginning inventories, and imports) grew more quickly than the sum of domestic consumption and exports—a situation that put downward pressure on wholesale cheese prices. According to projections released by ERS in June 2019, prices received by farmers for their milk are forecast to increase in 2019 and the average wholesale price of Cheddar cheese is forecast to rise from $1.54 per pound in 2018 to $1.64 in 2019. More information on ERS’s farm share data can be found in the Price Spreads from Farm to Consumer data product, updated in June 2019.

Inflation in retail food prices has trended down over the past 20 years

Wednesday, July 24, 2019

Historically, grocery store food prices have generally risen each year. However, in 2016, retail food prices actually fell 1.3 percent and fell again in 2017 (0.2 percent). These back-to-back years of food price deflation helped lower the 20-year moving average for grocery store price inflation from 3.6 percent in 1999 to 2.0 percent in 2018. Beginning in 2015, increased U.S. production of agricultural commodities, such as beef cattle and eggs, and lower energy prices contributed to the 2016 and 2017 decreases in retail food prices. In addition, a strong U.S. dollar since 2014 made imported foods (i.e., many fruits and vegetables, fish, and sugar) less expensive. Another contributing factor to low retail food price inflation in recent years may be stepped up competition on the basis of price for U.S. consumers’ food dollars. This chart appears in the article, “Retail Food Price Inflation Has Slowed Over Time,” from the July 2019 edition of ERS’s Amber Waves magazine.

Recommended quantities, varieties of fruits and vegetables could be eaten for $2.10 to $2.60 per day in 2016

Tuesday, July 16, 2019

“Make half your plate fruits and vegetables” is among USDA’s key messages about how Americans can achieve healthy diets. However, many Americans still consume an insufficient quantity and variety of fruits and vegetables. One reason may be a perception that these foods are expensive. To address this perception, ERS reports the average cost to consume 154 fresh and processed fruits and vegetables in cup equivalents. A cup equivalent is generally the edible portion of a fruit or vegetable that will fit in a 1-cup measuring cup. Researchers also use the data to create baskets of products that would satisfy the 2 cup equivalents of fruit and the 2.5 cup equivalents of vegetables recommended for a person on a 2,000-calorie-per-day diet. In 2016, it was possible to meet these recommendations for about $2.10 to $2.60 per day. One basket in this cost range contains 1 cup equivalent each of watermelon and canned pears (packed in juice) as well as 1 cup equivalent of canned tomatoes and ½ cup equivalent each of potatoes, frozen spinach, and canned black beans. This example basket and others appear in the Amber Waves article, “Americans Still Can Meet Fruit and Vegetable Dietary Guidelines for $2.10-$2.60 per Day,” published in June 2019.

Cost of a home-grilled cheeseburger up 8 cents from last year

Monday, July 1, 2019

If your July 4 cookout includes cheeseburgers, they will be a bit pricier than last year’s burgers. In May 2019 (latest available prices), the ingredients for a home-prepared quarter-pound cheeseburger totaled $1.75 per burger, with ground beef making up the largest cost at $0.96 and cheddar cheese accounting for $0.33. This same cheeseburger would have cost $1.67 to prepare in May 2018, an increase of 4.8 percent. Retail prices for one pound quantities of all of the ingredients, with the exception of bread, were higher in May 2019 compared with May 2018. Higher ground beef prices accounted for half of the 8-cent increase between 2018 and 2019, and cheddar cheese costs were 1 cent more per burger in May 2019. Iceberg lettuce and tomato prices rose the most—14.5 and 8.8 percent, respectively—but the small amount of these toppings added just 3 cents to per burger costs. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated June 25, 2019.

Energy costs accounted for 4.4 cents of the U.S. food-at-home dollar in 2017

Thursday, June 6, 2019

With prices rising at the gas pump, people may be asking how higher fuel prices might affect food costs. ERS’s Food Dollar Series breaks out the value added to food by 12 industry groups, including energy services, such as electricity, natural gas, and petroleum products. In 2017, 4.4 cents of a typical dollar spent by U.S. consumers on domestically produced food at retail food stores represented costs related to energy services. Higher oil prices in 2019 could cause energy’s share of the food-at-home dollar to rise as it did between 2002 and 2008, when energy costs rose faster than costs of the other 11 industry groups. Energy’s share of the food-at-home dollar grew from 4.8 cents in 2002 to 7.5 cents in 2008. This was a smaller increase than the rise in oil prices themselves because the food industry made adjustments to reduce energy use. The food industry may make similar adjustments in response to 2019 oil prices. Consumers may also adjust their food purchases, shifting to foods that use less energy inputs if retail prices rise more sharply for energy-intensive foods. Such industry and consumer adjustments could lessen the expected increase in energy’s share of the food-at-home dollar. This chart is from ERS’s Food Dollar Series data product.

Farm share of U.S. food dollar declined slightly in 2017

Wednesday, April 17, 2019

On average, U.S. farmers received 14.6 cents for farm commodity sales from each dollar spent on domestically produced food in 2017, down from 14.8 cents in 2016—a 1.4-percent decline. ERS uses input-output analysis to calculate the farm and marketing shares from a typical food dollar, including food purchased at grocery stores and at restaurants, coffee shops, and other eating-out places. Although 2017 was the 6th consecutive year the farm share dropped, the decline in 2017 was smaller than in 2016 (4.5 percent) and 2015 (9.9 percent). Unlike in the previous 2 years, average prices received by U.S. farmers went up in 2017 as measured by the Producer Price Index for farm products. The decline in farm share also coincides with 6 consecutive years of increases in the share of the food dollar going to the foodservice industry. Increases in food-away-from-home spending by consumers drives down the farm share of the food dollar. Farmers receive a smaller percentage from eating-out expenditures because food makes up a smaller share of total costs due to restaurants’ added costs for preparing and serving meals. The data for this chart can be found in ERS’s Food Dollar Series data product, updated March 2019.

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

Thursday, March 28, 2019

Between 2009 and 2018, retail food prices rose an average of 1.2 percent per year nationally. However, food-at-home price inflation varies by geographic location. Over the same 10-year period, retail food prices rose an average of 1.7 percent per year in St. Louis, while prices in Dallas rose on average 0.6 percent per year. Averaging 10 years of annual data smooths out year-to-year “noise”—volatile price swings that obscure the bigger picture of relative food price increases by city. Different rates of change in transportation costs and retail overhead expenses, such as labor and rent, can explain some of the variation among cities because cost increases are often passed along to the consumer in the form of higher grocery prices. Furthermore, differences in consumer food preferences among cities for specific foods may help explain variation in inflation rates. For example, a city whose residents strongly preferred foods with little price inflation (such as pork and poultry at 1.4 and 1.5 percent per year, respectively, in 2009–2018) might have had a lower 10-year average inflation level than a city whose residents purchased more beef or veal, which increased an average of 3.4 percent per year in 2009–2018. This chart appears in an ERS data visualization, Food Price Environment: Interactive Visualization, released March 2019.

2019 inflation in grocery store food prices expected to exceed that of 2018

Thursday, February 21, 2019

Over the last decade, grocery store food prices in the United States have had their ups and downs, with average annual prices decreasing as much as 1.3 percent in 2016 and increasing as much as 4.8 percent in 2011. Lower retail food price inflation in 2009 and 2010 reflected the economywide downturn caused by the Great Recession of 2007-09. Food-at-home prices rebounded in 2011 and rose between 0.9 and 2.5 percent annually in 2012-15. In 2016 and 2017, however, retail food prices declined because of increases in farm- and wholesale-level production, lower prices for oil and other production inputs, as well as exchange rates that made imported foods less expensive. In 2018, retail food prices rose 0.4 percent. ERS expects retail food prices to continue this upward trend in 2019, with overall food-at-home prices forecast to increase between 1 and 2 percent. Consumers can expect some variation among grocery subcategories. For instance, retail dairy prices are expected to rise between 3 and 4 percent, while prices for fats and oils are expected to decrease by between 2 and 3 percent. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated February 21, 2019.

Prices for most baking ingredients decline in 2018

Tuesday, December 18, 2018

This holiday season, baking essentials could cost less than they did last year. A basket comprising a dozen eggs, a 1-pound container of margarine, a 5-pound bag of flour, 4-pound bag of sugar, and a gallon of whole milk cost $10.85 in October 2018 compared to $11.57 in October 2017, a decrease of 6.2 percent. This decrease is driven by lower prices in 2018 across four of the five foods. The largest savings are found in flour, sugar, and milk—flour prices are down 9.4 percent, sugar prices fell 9.3 percent, and whole milk prices are 7.8 percent lower. Egg prices, on the other hand, increased 7.8 percent or 12 cents per dozen. Due in part to prices adjusting from lows in 2016 and 2017, egg prices have been moving upward in much of 2018. However, additional savings could be found in December as grocers often offer discounts on holiday food items. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated November 21, 2018.

Food accounted for 12.9 percent of household spending in 2017

Thursday, December 13, 2018

The average American household spent a slightly larger share of its budget on total food—both groceries and restaurant purchases—in 2017 than in 2016. The increase from 12.6 percent of total expenditures in 2016 to 12.9 percent of expenditures in 2017, possibly reflects the 0.9-percent increase in total food prices, combined with decreased expenditure shares for savings and for personal insurance and pensions. With a 12.9- percent share, food ranked third in 2017—behind housing (33.1 percent) and transportation (15.9 percent)—in a typical American household’s expenditures. Breaking down the 2017 food share, the average household spent 7.3 percent of its total budget (57 percent of its food budget) at grocery stores and 5.6 percent of its total budget (43 percent of its food budget) at restaurants. Looking at expenditure shares over time, food’s share had been declining since 1984 (the first year of available data), when food expenditures had accounted for 15 percent of consumer spending. However, for the last 2 years, food’s share of the total budget has increased from 12.5 percent in 2015. This chart can be found in the ERS publication, Selected charts from Ag and Food Statistics: Charting the Essentials, October 2018.

Fruit and vegetable costs vary by product and form

Wednesday, November 28, 2018

At the grocery store, fruits and vegetables are sold in many forms, including canned, frozen, dried, juiced, and fresh products. However, which forms are less expensive? ERS researchers estimated average retail prices paid in 2016 for 24 fresh fruits, 40 fresh vegetables, and 90 processed fruits and vegetables, measured in cup equivalents. A cup equivalent is generally the edible portion that will fit in a 1-cup measuring cup; for raw leafy vegetables, a cup equivalent is 2 cups, and for raisins and other dried fruits, it is one-half cup. As seen in the examples of spinach, carrots, and apricots, neither fresh nor processed forms turn out to be consistently less expensive to consume across fruit/vegetable types. For instance, spinach is more expensive in its fresh, boiled form than when frozen or canned, while carrots are less expensive in fresh, boiled form than when frozen or canned. Relative retail prices may reflect the different prices received by growers, as well as differences in processing, handling, and spoilage costs, which vary by form and product. This chart is based on the Fruit and Vegetable Prices on the ERS website.

The Great Recession affected food spending patterns of elderly households less than those of non-elderly households

Tuesday, November 27, 2018

Elderly households (those with at least one individual age 65 or older) tend to be less affected by economic downturns, possibly because they have more fixed incomes from Social Security or pensions that do not depend on employment. Using data from the Bureau of Labor Statistics’ Consumer Expenditure Survey, ERS researchers found that from 2005 to 2010, elderly households did not significantly change their share of food spending allocated to grocery stores and other food-at-home retailers or their share allocated to eating-out options. By 2016, elderly households had reduced their share of food-at-home expenditures by about 3 percentage points and increased their share of spending at fast-food places, although the fast-food share remained below that of non-elderly households. In contrast to elderly households, non-elderly households spent less of their food budgets at full-service restaurants and more on food at home in 2010 and 2016 than in 2005. This chart appears in “Food Spending of Middle-Income Households Hardest Hit by the Great Recession” from ERS’s Amber Waves magazine, September 2018.

Millennials devote more of their at-home food budgets to pasta than older generations

Tuesday, October 23, 2018

On World Pasta Day, October 25, it may be U.S. Millennials (more than other age groups) who celebrate with plates of spaghetti, linguini, or macaroni. Using household purchase data, ERS researchers found that, of all the generations, Millennials assign the largest share of their grocery store (food at home) budget to pasta, with Gen Xers running a close second. Among households earning between $22,500 and $28,332 per household member, Millennials devoted 3.7 percent of their 2014 food-at-home dollars to pasta purchases, Gen Xers 3.5 percent, Baby Boomers 2.9 percent, and Traditionalists 2.8 percent. Across generations, pasta purchases exhibited a negative relationship with income; as households become wealthier, they buy less pasta (which is often inexpensive and shelf-stable), opting to purchase instead more perishable foods like fresh meats and fresh fruits and vegetables. Millennials also assigned more of their 2014 food-at-home budgets to prepared foods and sugar and sweets than other generations—perhaps, in a quest for convenience and time savings. A version of this chart appears in the ERS report, Food Purchase Decisions of Millennial Households Compared to Other Generations, December 2017.

Inflation-adjusted food spending by U.S. households fell during the Great Recession and did not recover until 2015

Tuesday, October 16, 2018

The Great Recession, which officially ran from December 2007 to June 2009, was the most severe economic downturn since the Great Depression. Using data from the Bureau of Labor Statistics’ Consumer Expenditure Survey, ERS researchers examined household food spending from 2005 to 2016 using inflation-adjusted dollars to make the expenditures comparable across years. They found that total food spending declined by 7 percent from 2007 to 2010 and did not return to pre-recession levels until 2015. During this period, however, households adjusted their spending on food at grocery stores and other retailers (food at home) differently from spending at restaurants, fast-food places, and other food-away-from-home establishments. In every year except 2010, food-at-home spending exceeded 2005 levels. In contrast, spending at food-away-from-home establishments declined by 18 percent from 2006 to 2010 and did not recover to its 2005 level until 2016. Thus, the share of total household food expenditures spent on food away from home declined from 40.5 percent in 2005 to 36.3 percent in 2010, before rising to 38.8 percent in 2016. This chart appears in “Food Spending of Middle-Income Households Hardest Hit by the Great Recession” from ERS’s Amber Waves magazine, September 2018.

Farm share of retail price for whole milk was up in 2017

Thursday, October 4, 2018

Over the past decade, the farm share for a gallon of whole milk—the ratio of what dairy farmers received (farm price) to what consumers paid in grocery stores (retail price)—has fluctuated between 40 and 61 percent. It peaked at 61 percent in 2014 as higher U.S. exports of cheese, butter, and nonfat dry milk allowed farmers to collect higher prices for farm milk. However, U.S. exports weakened in 2015 with changes in international dairy markets and slower growth in global demand for dairy products. Exports of cheese, for example, decreased by 14 percent from 2014 to 2015. The farm price of whole milk fell from $2.26 per gallon in 2014 to $1.65 in 2015 before bottoming out at $1.51 in 2016, or 47 percent of the retail price. In 2017, the farm price of whole milk returned to $1.65 per gallon, and dairy farmers received 51 percent of whole milk’s retail price. According to ERS forecasts released in September 2018, the annual average price received by dairy farmers for milk may be less in 2018 than 2017, but is expected to increase through 2019. This chart is based on the Price Spreads from Farm to Consumer data product on the ERS website.

U.S. spending on food away from home continued to outpace food-at-home spending in 2017

Tuesday, September 25, 2018

U.S. consumers, businesses, and government entities spent $1.62 trillion on food and beverages in 2017. Spending at food-away-from-home establishments—restaurants, school cafeterias, sports venues, and other eating places—accounted for 53.8 percent of these expenditures, and the remaining 46.2 percent took place at grocery stores, supercenters, convenience stores, and other retailers. A 53.8-percent share of food expenditures does not equate to 53.8 percent of food quantities, as food purchased away from home is generally higher priced than food prepared at home. Food-away-from-home outlets incur costs for the workers required to prepare and serve food, as well as for buildings, equipment, and utilities. The away-from-home market, which accounted for about one-third of total food expenditures 50 years ago, saw its share grow through the decades, except in some recession years. During the 2007-09 recession, food away from home’s share of total food spending stayed at or just below 50 percent before surpassing its pre-recession share by rising to 50.2 percent in 2010 and continuing to grow to its 2017 share of 53.8 percent. The data for this chart are from the ERS report, Measuring the Value of the U.S. Food System: Revisions to the Food Expenditure Series, released on September 20, 2018.

SNAP participants spend less on restaurant foods than eligible nonparticipants

Thursday, August 23, 2018

In a recent study, ERS researchers used data from USDA’s 2012-13 National Household Food Acquisition and Purchase Survey (FoodAPS) to look at the factors that affect demand for convenience foods, including participation in USDA’s Supplemental Nutrition Assistance Program (SNAP). SNAP provides low-income households with monthly benefits to purchase food at authorized food stores. Estimates from the ERS study show that SNAP participants spend less on restaurant foods and more on foods from grocery stores relative to non-SNAP households that qualify for the program. SNAP participation was associated with a 26-percent higher level of ready-to-eat grocery store food purchases and a 21-percent higher level of purchases of non-ready-to-eat grocery store food, such as raw meats, seafood, dry beans, pasta, and other foods requiring cooking and preparation time. In addition, eligible non-SNAP households purchased almost twice as much full-service restaurant foods as SNAP households. The statistics for this chart are from the ERS report, Consumers Balance Time and Money in Purchasing Convenience Foods, June 2018.

Vegetable costs range from 17 cents to $2.47 per cup equivalent

Tuesday, August 21, 2018

“Add More Vegetables to Your Day” and “Vary Your Veggies” are among USDA’s key messages about how Americans can achieve healthier diets. However, many Americans still consume an insufficient quantity and variety of vegetables. One reason may be a lingering perception that vegetables are expensive. To address this perception, ERS recently estimated average retail prices paid in 2016 for 92 fresh and processed vegetables (including legumes), measured in cup equivalents. A cup equivalent is the edible portion that will generally fit in a 1-cup measuring cup; 2 cups for lettuce and other raw leafy greens. ERS researchers found that iceberg lettuce, fresh whole carrots, canned green beans, and 13 other products cost less than 40 cents per cup equivalent, while 55 vegetables, including baby carrots, frozen mixed vegetables, and canned tomatoes, cost between 40 and 79 cents per cup equivalent. Fresh asparagus, at $2.47 per cup equivalent, is the priciest of these 92 vegetables, and dried pinto beans at $0.17 are the least expensive. The data in this chart are from ERS's Fruit and Vegetable Prices data product, updated July 11, 2018.

Farm share of retail price of head lettuce rose in 2017

Thursday, August 9, 2018

The farm share of the retail price of head lettuce—the ratio of what farmers received to what consumers paid per pound in grocery stores—was 38 percent in 2017, the highest farm share since the 1990s. In 2017, while the national, monthly average price of head lettuce at grocery stores fell 3 cents to $1.03 per pound, the monthly average price received by farmers rose 12 cents to $0.37 per pound. ERS’s calculation of the farm share for head lettuce takes into account loss that occurs in grocery stores from spoilage and trimming by assuming that farmers supply a little less than 1.1 pounds for each pound sold at retail. Farm prices for head lettuce were particularly high during the first half of 2017. Flooding in California, brought on by heavy rains early in the year, delayed the planting and harvesting of head lettuce. California accounts for close to three-fourths of head lettuce production. Reduced supplies of head lettuce pushed farm prices higher, but had only a short-lived impact on retail prices. This chart appears in “Monitoring Trends in Retail Prices and Farm Shares of Food Products” in the August 2018 issue of ERS’s Amber Waves magazine.

Watermelon is the least expensive fruit on a per cup equivalent basis

Wednesday, August 1, 2018

Celebrating National Watermelon Day this Friday with a big slice of watermelon will be good for your health and for your food budget. ERS recently calculated average prices paid by consumers in 2016 for 62 fresh and processed fruits measured in cup equivalents. A cup equivalent is the edible portion that will generally fit in a 1-cup measuring cup; 1/2 cup for raisins and other dried fruits. Fresh watermelon at 20 cents per cup equivalent and apple juice (made from concentrate) at 26 cents per cup equivalent were the lowest priced fruits, while fresh blackberries, fresh raspberries, and canned cherries were the priciest. Twenty-nine fruits cost less than 80 cents per cup equivalent. Mechanical versus manual harvesting, distance the fruit travels to the store, perishability, and multiple other factors all play a role in fruit costs per cup equivalent. The data in this chart are from ERS's Fruit and Vegetable Prices data product, updated July 11, 2018.

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