Debunking the Food Inflation Myth in Two Charts



Comments (13)

  1. Jasper says:

    I see it says ice cream has stayed flat. This is nominally true, but in the past ice cream was sold in half gallon containers. Those first shrunk to 1.75 quarts, which eventually shrunk again to today’s 1.5 quart size. The nominal price is the same but you’re getting 25% less ice cream for that price. This has also happened with mayonnaise, which went from 32 oz to 30 oz, and a lot of canned goods that used to be 16 ounces and are now 15.5 or 15 oz. I’m sure there are other examples.

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  2. Matt McCarthy says:

    Hi Louis,

    I have to object to your idea that food inflation is a myth. If you look at the breakdown of the CPI, food prices have actually increased 1.5% over the past year. The other thing hidden in this data is how prices of different types of food have behaved. Highly-processed foods have remained largely stable, and in fact have decreased in many cases. However, prices of “whole foods”, such as fruits, vegetables, meats, and cheeses, have increased.

    My other objection is that the increase in obesity is evidence against America eating less. While I believe you’re correct that we are eating more, the obesity epidemic is directly related to “what” we’re eating, not “how much”. As pointed out above, highly-processed foods are cheaper. They are also the ones (particularly ones high in refined sugars and grains) that are linked to obesity. So, market dynamics have people purchasing the cheaper food, which is pushing more people toward obesity regardless of how much food they eat.

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  3. eliseo-perez@comcast.net says:

    What your charts don’t show is the hidden costs of not eating a plant based diet; e.g. cost of heart disease, hypertension, cancer, obesity,diabetes,arthritis etc. also there is growing trend to be more health conscious but there are still subsidies in the wrong industries so that it is cheaper to eat at McDonald’s dinner for a family of four then a dinner à la Mediterranean diet. In my opinion cost of food and health care are intimately interrelated.

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  4. Ed in SC says:

    How much we spend on groceries compared to 30 years ago is only part of the equation. Americans eat out and consume more fast food now than 30 years ago. To be more accurate, you should combine cost of groceries plus cost of all meals outside of the home plus cost of fast foods purchased to get facts.

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  5. ed says:

    You have a nice model but…

    Our grocery bills have been going up for years despite our frugal nature. In fact we have more than doubled our food cost over about 6 years. You need to go to the store with fewer dollars in your pocket and try to buy for even a small family!

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    Lindy Reply:

    No Kidding! Maybe people are spending less because more people are using food stamps instead of their own income? Maybe they don’t have much left to spend on food after they pay their rent/mortgage, utilities and other bills? Maybe they cannot afford to buy as much meat? I have done my own cooking for my husband and I all our married life, and you can’t tell me the cost of buying staples, meat, diary products, veggies & fruits,non-food items and such hasn’t gone up in price over the last couple years. I have to spend twice as much as I used to, to get the same amount now. It helps if the items are on sale, but meat is still high. You figure a jar of Miracle Whip used to cost around $1.40 at the most and sometimes on sale for .99 cents. A jar of Miracle Whip now cost $3.59 -$4.00 a jar. It was as high as $4.99 for a while in the store, and that is just ONE example of rising costs of food.

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  6. lynn tylczak says:

    The “average percentage of income” spent on food is a meaningless statistic given the income inequality in America. For the vast majority of us, the percentage of our income that we spend on food has skyrocketed! Surged! Spiked! That,or we have changed our buying habits and the statistic is comparing apples or oranges. So I say “baloney” to your conclusion!

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  7. Doug says:

    Why did you choose 1982? That was a bad crop, high-inflation time. Arbitrary. Also, taxes are much higher so that as a percentage of take-home-pay food is a lot more expensive. In all, I would say that this little study is bunk.

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  8. Major_Freedom says:

    The data reported in this wallstreetdaily article is inaccurate.

    This article claims butter was down 34.8 % 1982-2012.

    However, using the BLS data:

    http://www.bls.gov/ro3/apmw.htm

    Butter actually went from 2.019 in Jan 1982 to 3.18 in April 2012.

    The same thing is the case with many other goods. For example, this article claims peppers went up 34%. According to the BLS source however, peppers were .85 in Jan 82′ and 2.35 in Dec 12′, an increase far higher than 34%.

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  9. retired mike says:

    Being retired I watch my food prices. Three years ago I paid $1.27 for a quart of salad dressing that now cost $3.68. This is just one example of the price increases I find in the grocery store all the time and you never see a price go down except on seasonal items. So to me this article is pure bunk.

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  10. george says:

    Total BS! Do you even know what a grocery store looks like? Have you ever bought your own food? I have to. Right now prices are changing almost weekly. Wages have gone up what, 5% since the 80’s . In the 80’s I bought tuna for .30, bread for $1, tomatoes for .20, Milk was $1.65. Maybe you should seek out a place that sells groceries and do some first hand research. You are just one of those government propaganda outlets that keeps saying it ok nothing to worry about. Believe what we tell you not what your eyes see. Perhaps you should ask your Mom what she paid to feed you and get a dose of reality before you spread more twisted government numbers.

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  11. Alex says:

    Louis, stick to your Wall Street analyses and macroeconomic models. I’m a father of four and do the grocery shopping since I enjoy cooking healthy, wholesome meals, and let me tell you, until six years ago I used to shop at Costco, Ralph’s and Trader Joe’s, when I had to “downgrade” to Stater Bros, my local ethnic grocer and restricted trips to Costco that lasted 2-3 years when I had to downgrade even further to the 99 cent store. My ethnic grocer and a local salvage food store. I doubt you have the faintest idea of what a salvage food store is but the word salvage next to food should give pause and discomfort to anybody with some insight. I’m 40 years old so the 1982 baseline is useless to me and to most Americans now. Try the last 20 years to get a clearer picture and go year by year. The last 5 years have been the worst. Food inflation is certainly a huge problem for most Americans unless your diet is restricted to dollar store cookies and fast food dollar menu.

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  12. Lance says:

    Congratulations Einstein. You measured inflation by removing the effect of inflation. That’s like using a word in its own definition. Your only result is that the price of food has been skyrocketing at a slower rate than the prices of other stuff, and your second chart only proves the result of the first. All the other stuff being more expensive (combined with the fact that real wages have remained the same since 1982) means, you guessed it, people spend less money on food, which is, unhelpfully, also increasing in price.

    Sorry for being late.

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