Overview
The Consumer Price Index (CPI) for all food is
forecast to increase 5.0 to 6.0 percent in 2008, as
retailers continue to pass on higher commodity and energy
costs to consumers in the form of higher retail prices.
The CPI for food increased 4.0 percent in 2007, the highest
annual increase since 1990. Food-at-home prices,
led by eggs, dairy, and poultry prices, increased 4.2
percent, while food-away-from-home prices were up 3.6
percent in 2007.
The total spent for all food consumed in the U.S. was $1,139.4 billion dollars in 2007, a 5.4 percent increase from $1,081.4 billion in 2006. The ERS Food Expenditure data series indicated that spending on food away from home was 48.9 percent of the $1,139.4 billion in total food expenditures in 2007—spending for food at home was 51.1 percent. Families spent 9.8 percent of their disposable personal income on food—as disposable personal income continues to climb, the share spent on food declines. More overview...
Features
Rising Food Prices—Retail food price inflation has accelerated in 2007 as higher commodity and energy prices have begun to work their way through the food price system. This short USDA news video focuses on the main factors impacting retail food price inflation and provides insight into what is likely to occur for the rest of the year (requires Windows Media Player).
Taxing Snack Foods: What to Expect for Diet and Tax RevenuesHealth policy advocates have proposed excise taxes on snack foods as a possible way to address the growing prevalence of obesity and overweight in the United States. Using household scanner data to examine the likely impacts of such a measure on consumption of salty snacks, the study finds that relatively low tax rates of 1 cent per pound and 1 percent of value would not appreciably alter consumptionand, thus, would have little effect on diet qualitybut would generate $40-$100 million per year in tax revenues.
How Much Do Americans Pay for Fruits and Vegetables?One argument for not consuming fruits and vegetables is that they are too expensive, especially when fresh. Yet among 154 forms of fruits and vegetables priced using ACNeilsen Homescan data, more than half were estimated to cost 25 cents or less per serving. Consumers can meet the recommendation of three servings of fruits and four servings of vegetables daily for 64 cents. The related data product is a collection of spreadsheets that contain all the data used in the report and are presented to show exactly how ERS arrived at the costs per serving figures.
A Workshop on the Use of Scanner Data in Policy AnalysisAs markets become more segmented and contracts replace spot market transactions,
the declining volume of available data associated with spot transactions
becomes less representative and therefore less useful for research. As
a result, researchers are increasingly turning to retail scanner data
to decipher market workings. Not only are such data plentiful (although
expensive), but with links to demographics of individual households, the
data provide a window on distributional issues. The voluminous quantity
of the data, while an asset, can also present researchers with special
challenges. In June 2003, the Economic Research Service and the Farm Foundation conducted a workshop on use of household scanner data in food policy analysis. The workshop provided a forum for participants to discuss strategies in using scanner data. Panels and presentations were led by representatives from the Federal Government and higher education. An agenda, paper abstracts, and participant bios are available.
U.S. Fresh Produce Markets: Marketing
Channels, Trade Practices, and Retail Pricing BehaviorRetail
consolidation, changing consumer demand, marketing practices, and new
technology have transformed U.S. fresh fruit and vegetable markets in
the past decade. This capstone report synthesizes results of a multiphase
project that examined the dynamics of produce markets, the produce shipper-retailer
relationship, and how these changes affect the relative market influence
of producers, retailers, and consumers. See The
ERS produce markets project for background information and a complete
list of publications related to the project.
The online version of ERS's magazine, Amber
Waves, includes articles on the determinants
of food prices, consumer-driven
agriculture, calculating the food marketing bill. Articles also highlight the Retail
Meat Scanner Data, and go behind the Meat Price Spread data.
Recommended Readings
Exploring Food Purchase Behavior of Low-Income
Households: How Do They Economize?A comparison of purchases
by U.S. households of different income levels, finds that low-income shoppers
spend less on food purchases despite facing generally higher purchase
prices. Households can economize on food spending by purchasing more discounted
products, favoring private-label products over brand name products, pursuing
volume discounts, or settling for a less expensive product within a product
class.
Retail Food Price Forecasting at ERS:
The Process, Methodology, and Performance from 1984 to 1997ERS
periodically evaluates current forecasting procedures for the CPI for
food to determine if alternative procedures should be incorporated. Intentions
of this study were to evaluate past forecasting performances, identifying
areas where improvements could be made, and to document the current forecasting
procedures to users of the information.
See all recommended readings...
Recommended Data Products
Food CPI Forecasts2006
and 2007 forecasts for all food, food away from home,
food at home, and 15 selected food categories.
ERS Food Expenditure TablesFood expenditures
estimated by ERS from data that measure current sales or receipts by each
type of store that sells food. This method provides the most direct measurement
of food expenditures.
Food Baseline ProjectionsProjections
for the U.S. agricultural sector 10 years ahead, including crop production,
agricultural trade, farm income, and food prices. Projections are a description
of what would be expected to happen under the 2002 Farm Act, with very
specific external circumstances.
Recent Research Developments
Minimum Wage and Food Prices:
An Analysis of Price Pass-Through EffectsThis article in International
Food and Agribusiness Management Review explores the possibility that
because lower income households spend a proportionately larger share of
their income on food, the higher income from an increase in the minimum
wage may be offset by resulting higher food costs and finds that under
normal economic conditions it is unlikely that higher food costs would
fully offset the wage gains of minimum wage workers. Contact Gerald Schluter for more information.
Related Briefing Rooms
Related Links
USDA
Food Plans: Cost of Food—Provides information about the Thrifty Food Plan and other USDA Food Plans.
Experimental CPI Using Geometric
MeansProvides background at BLS website on the geometric mean
formula use in the CPI. Although the geometric formula was experimental
at one time, it was adopted by the BLS for some categories of the official
CPI index in January 1999.
Average Retail
Food PricesAverage retail prices estimated by the Bureau of
Labor Statistics from Consumer Price Index data for selected food items.
BLS Consumer Expenditure SurveyProgram
consists of two surveys (the quarterly Interview survey and the Diary
survey) that provide information on the buying habits of American consumers,
including data on their expenditures, income, and consumer unit (families
and single consumers) characteristics.
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