FOOD PRICES RISE FASTER THAN OTHER GOODS

The average American household allocates 12.6% of its spending on food, both at home and away from home, making food the third largest expenditure category behind housing and transportation. Typically, food prices rise in the same direction as economy-wide inflation, but their magnitudes may vary. But food price inflation has outpaced economy-wide inflation in 7 of the last 9 years. In 2015, food prices increased 1.9% percent, a smaller rise than the 2.4% increase the year before. Declining prices for pork, dairy, fats and oils, and fresh fruit helped ease food price inflation this year. But economy-wide inflation measured just 0.1% in 2015, in large part due to a 7.8% drop in transportation prices as a result of lower oil prices.

Source: USDA, 10/3/13, Food Prices Rise

ARE SNAP BENEFITS REALLY TOO LOW?

The new report from the President’s Council of Economic Advisers (CEA) that maintains SNAP benefits are too low and should be increased is wrong argues a researcher at the American Enterprise Institute. The data, she contends, show that SNAP eliminates hunger for the overwhelming majority of American children and leaves most recipient households with adequate food. The CEA’s claim that SNAP cannot sustain families through the end of the month overstates the problem she says. While food purchases for SNAP households do decline over the course of the month, this could be due to “short-term impatience.” In other words, households that get all their SNAP benefits at the beginning of the month spend it right away. Distributing SNAP benefits throughout the month might solve this problem, she says. And, while some argue that SNAP payments are too low to buy the USDA adequate diet on which those benefits are based, AEI suggests adjusting benefit levels only in high-food-cost areas.

Source: American Enterprise Institute, 1/20/16, SNAP Benefits

THANKSGIVING DINNER COST UP SLIGHTLY

The American Farm Bureau Federation’s annual informal price survey of classic items found on the Thanksgiving Day dinner table indicates the average cost of this year’s feast for 10 is $50.11, a 70-cent increase from last year’s average of $49.41. The big-ticket item – a 16-pound turkey – came in at a total of $23.04 this year. That’s roughly $1.44 per pound, an increase of less than 9 cents per pound, or a total of $1.39 per whole turkey, compared to 2014. The survey’s shopping list includes turkey, bread stuffing, sweet potatoes, rolls with butter, peas, cranberries, a relish tray of carrots and celery, pumpkin pie with whipped cream, and coffee and milk. The average cost of the dinner has remained around $49 since 2011. This year’s survey totaled over $50 for the first time.

Source: American Enterprise Institute, 11/19/15, Thanksgiving Dinner 

FOOD PRICES RISING

While food price inflation averaged 2.6% a year for the last 20 years, the fourth quarter of 2014 saw grocery store food prices that were 3.5% higher than the year before, and higher than the average food price inflation. Beef and veal prices saw the largest increase, rising 18.2% from the fourth quarter of 2013, the result of historically low U.S. herd sizes and steady consumer demand. Egg (7.9%), dairy (5.3%), and fresh fruit (4.6%) prices also rose faster than other commodities.

Source: USDA, 3/27/15, Food Prices

MEAT PRICES TO CLIMB IN 2015

Drought, disease, and demand forced beef and pork prices to rise in 2014, and the increase is likely to continue in 2015. As of November 2014, pork prices were up roughly 10% from last year, according to the USDA. The agency says it expects an additional increase of about 5% in 2015. Even eggs are more expensive: After a 7 to 8% increase in 2014, the price of eggs will tick up another percentage point or two this year. And beef is in a class by itself: USDA predicts beef and veal prices will end up with an 11 to 12% increase for 2014 and will rise by another 5% in 2015. “The two things low-income people struggle with the most are getting fresh fruits and vegetables and getting protein, so when those items go up in price, that’s a particularly problematic event,” said Jim Weill, president of the Food Research and Action Center.”

Source: NBC News, 1/1/15, Meat Prices