Food, Still a Bargain

July 27, 2011 — 

While U.S. food prices have increased lately to the distress of many, the percentage of disposable income Americans spend on food continues to shrink. According to the USDA’s Economic Research Service, that share averaged 9.4 percent during 2010, matching the record low set in 2009.

Back in 1929, the earliest year ERS reports, Americans spent 23.4 percent of their disposable incomes on food. They spent 20.3 percent on food at home, and 3.1 percent on food away from home. The highest percentage reported took place in 1933, during the peak of the Great Depression, when Americans spent 25.2 percent of their incomes on food. By the mid-1930s, the percentage began to generally decline each year until moving upward during the mid- to late- 1940s and World War II, when the percentage hovered in the low 20s. Since 1948, the slope has been distinctly downward. In 2000, Americans spent less than 10 percent of their disposable income on food for the first time.

Interestingly, the percentage we spend on meals away from home hasn’t changed that much, at 3.9 percent in 2010 compared with 3.1 percent in 1929. Our spending on food at home on the other hand has dropped dramatically, from 20.3 percent of income in 1929 to 5.5 percent in 2010.

View the historical chart from ERS.

Source: Drovers, John Maday, managing editor, July 26, 2011