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Learning to cope with the high cost of food

June 11, 2014

It will come as no surprise to anyone who does the family’s grocery shopping. The price of food just seems to keep going up and up, and leading the climb right now are meat and poultry, eggs and dairy, and fresh fruits. In the last five years, food price inflation has topped overall inflation, fueled by energy and transportation costs, weather events that impact agriculture, and the cost of processing, packaging and marketing food products. While food prices are less volatile than fuel prices, this comes as cold comfort to millions of Americans trying to stretch their food dollar to feed hungry families.

Between 2006 and 2013, the consumer price index (CPI) for “all-food,” a designation that includes both food eaten at home, i.e. from the grocery store, and food eaten out, rose 21%. (Americans eat about half of their food at home and half away from home.) And rising food costs come on top of stagnant or falling incomes for many wage earners.

High food prices hit lower income households harder. In 2012, middle-income families spent 12.3% of their income on food, compared to low-income households who spent 35.1% of their income, leaving less for other necessities. More than 14% of U.S. households were “food insecure” in 2012, and one in five households with children was affected by food insecurity.

In 2014, the USDA’s Economic Research Service (ERS) projects that the cost of all food is expected to increase from 2.5% to 3.5%. Beef and veal prices are expected to increase 5.5% to 6.5% in 2014 (cattle inventory is currently at its lowest level since 1951, forcing retail beef prices to record highs). Pork prices are predicted to rise 9.4% and eggs by 5% to 6%. Citrus prices to date are up 21.3% over last year, due to a citrus disease in Florida and a winter freeze in southern California.

Economists point to the historic drought in California (the eighth largest economy in the world) as a major contributor to rising food prices, and when the drought will end is anyone’s guess. Throughout the Golden State, planners are currently working out how they would import water. And in the long-term future, numerous reports from government agencies, non-government science organizations and business consultants forecast that agriculture is one of our economic sectors most vulnerable to climate change.