September 11, 2008

Income spent on food remains unchanged

Despite all the hubbub of higher food prices, Americans are still spending less than 10 percent of their disposable income on food, according to analysis in the latest Amber Waves publication produced by the Economic Research Service.

Although food prices over the last two years have risen faster than at any time since 1990, ERS said the average U.S. consumer spent only 9.8 percent of disposable personal income on food in 2007 – 5.7 percent on food at home plus 4.1 percent on food away from home.

The percentage of disposable income spent on all food has also remained constant from 2005 to 2007.

Although prices for all food purchased in the U.S. increased 4.0 percent in 2007, up from the 2.4-percent gain in 2006, we’re still paying less for food today than in 1970. Back then we spent 13.9 percent of our disposable income on food.

In other words, over the last 37 years, American farmers and agribusinesses have worked to keep us the best-fed and cheapest-fed nation in the history of the world. That's not going to change in the future.

For the full article, click here.

There's also an interesting article that explains why rice prices jumped so much in the past year. And no, it doesn't have anything to do with ethanol or other biofuels like some would have us believe. Instead, you can blame the food riots on export bans, restrictions and taxes implemented by several major suppliers. That's what happens when people loose their cool and overreact.

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