Household spending: 7 surprising facts about food prices


Many people believe that Americans waste a bunch of money eating out — that avocado toast and lattes are budget wreckers, for example — and that’s sort of true.

In 2014, an important line was crossed — for the first time since the government tracked this sort of thing, families spent more eating out than eating at home.

But when you really look into the numbers about the way Americans spend money on food, a far more complex picture emerges.  Like many other typical household purchases — such as refrigerators or clothes — many food items are actually much cheaper than they were a generation ago. And overall, food isn’t nearly the budget-busting line item it used to be.

In fact, according to government statistics, U.S. families are spending much LESS overall on food than they did a generation or two ago. Food now eats up about half as much of the family budget than it once did.

Even that fact is a good news/bad news story, however, according to Annemarie Kuhns, a food economist at the U.S. Department of Agriculture.  Part of the reason food consumers less of household spending is because housing costs and health care consumes so much more.

“It really depends on the food you are purchasing,” Kuhns said. “Processed food is less expensive, but fresh fruits and vegetables are much more expensive.”

To get a better picture of what’s really going on with your budget, here are some surprising facts about food spending. As you read them, remember, it’s always easy to find an anecdote or two that confirms a belief you might have — most of us have a friend who complains about not being able to afford a home, but does indeed indulge in avocado toast regularly. That’s just an anecdote, however, a narrow view of things.  To really understand the issue, you have to look at the broader picture.

Food is generally getting more expensive

First off, you aren’t crazy. Your grocery bill keeps getting bigger — and the cost of food is rising faster than most things. From 2012-2016, food prices rose 6.1%, but the overall consumer price index rose only 4.5%.  NOTE:  That’s bad, but it’s less than the 9.5% rise in housing costs and 11.7% increase in medical care costs. This is a long-term trend, too. The USDA says grocery store prices are up 4.5% faster than economy-wide prices during the past 30 years.

Food is cheaper this year

Last year, for the first time in nearly 50 years, so-called “food-at-home” prices dropped. The USDA says retail food fell 1.3%. Some items fell far more. The price of eggs, for example, dropped almost 20% in a year, thanks to lingering impacts of the avian flu. That’s good news for you, but bad news for grocery stores, and we’ve seen plenty of them punished on Wall Street as a result. Kroger, the nation’s largest supermarket chain, said in March that its same-store sales had fallen 0.7% during the end of 2016.