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Eating out or at home, food is a bargain for US consumers
5/23/2012
Photo of a fruit basket.
Fresh fruits are abundant & relatively low cost in the US
Americans spend less of their income on food than others
 
Some things are changing for the American consumer while other things remain the same. Recent national statistics show that dollars spent on food away from home are at an all-time high, approaching the percentage of the food dollar spent on meals consumed at home. But no matter where food expenditures take place, there is one satisfying constant- US consumers, including those in Oregon, still enjoy the cheapest, most abundant food supply in the world. In fact, the percentage of disposable income spent by Americans on food has never been lower.

"For years, US consumers have been getting a bargain for their food dollar thanks to our productive, efficient farmers and ranchers," says Oregon Department of Agriculture Director Katy Coba.

The US Department of Agriculture's Economic Research Service (ERS) has compiled statistics through 2010 that shed light on a couple of historical trends. First, Americans are spending, on average, 9.4 percent of their disposable income on food- the lowest percentage of any country on record. That's down from 9.8 percent in 2005. Twenty years ago, Americans spent 11.4 percent of their disposable income on food. Thirty years ago, that figure was 13.2 percent. Going back further in history, Americans spent 17.5 percent of their income on food in 1960. When many of today's senior citizens were born during the Depression, the figure was more than 25 percent.

Statistics are not available for individual states, but Oregon generally follows the national trend.

US consumers spent more than a trillion dollars on food in 2010 compared to just $11 billion in 1933. Of course, the nation's population has risen dramatically since then. But the relatively low percentage of income spent by US consumers on food is still the envy of the world.

"Our farmers continue to be efficient and the American consumer is able to enjoy fairly steady low prices for food, especially compared to other costs they may face," says Brent Searle, ODA analyst and special assistant to the director.

Of course, that means that 90.6 percent of the US consumer's disposable income can be spent on items other than food, such as housing, health care, automobiles, leisure, and recreation.

By comparison, other countries don't fare as well. International statistics provided by ERS only account for the percentage of disposable income spent on food consumed at home. Still, the numbers show huge disparities. Ranking behind the US (at 5.7 percent for food-at-home) are United Kingdom (8.8 percent), Canada (9.3 percent), and Mexico (24.3 percent), all the way to Indonesia (47 percent).

Not all food available to the American consumer is grown or produced in the US. Plenty of foods are imported. Likewise, much of what is produced by US farmers and ranchers goes overseas. But the net result has been relatively low prices because of high productivity and efficiency by domestic agriculture.

The low percentage spent on food is great news for consumers, but not necessarily for producers. On average, farmers get back less than 12 cents of every dollar paid by the consumer. The balance primarily goes to processors, wholesalers, and retailers. As recently as 1980, producers received 31 cents of each consumer dollar.

The latest ERS statistics also show an interesting trend on where Americans are consuming their food. In 2010, Americans spent 47.9 percent of their food dollars away from home. That figure is also an all-time high. In 2005, the percentage of out-of-home expenditures was 46.5 percent. In 1990, that figure was 43 percent and it was 39 percent in 1980. Fifty years ago, US consumers spent just 26.2 percent of their food dollars out of the home. Of the $1.24 trillion spent on food in the US in 2010, $594 billion was spent away from home.

"These latest numbers indicate how much people are relying on convenience or other factors in our busy lives that lead to eating food not prepared at home," says Searle.

Since Oregon food products often find their way into the restaurant and food service industries, the trend of eating out more is valuable to Oregon producers and processors.

Food-at-home prices increased 0.3 percent in 2010- the lowest annual increase since 1967- while food-away-from home prices increased 1.3 percent.

"Food you buy to consume at home generally involves less labor or processing compared to food you would purchase in a restaurant," says Searle. "That's largely responsible for larger price increases for food purchased away from home."

Another set of ERS statistics focuses on the $646 billion spent in 2010 on food consumed at home. Specifically, it shows where that food is purchased. Two-thirds, precisely 67 percent of the sales, took place at grocery stores, supermarkets, and specialty food stores. Warehouse clubs, supercenters, and mass merchandisers such as Costco accounted for 16.5 percent of the food-at-home sales. The category that includes convenience stores was responsible for 7.6 percent while sales directly made by farmers and wholesalers claimed 5.9 percent. Home delivery and online sales capture the remaining 3.1 percent of food-at-home sales.

"The warehouse clubs and so-called big box stores are increasingly selling food to consumers," says Searle. "Their share of sales has grown steadily since the mid-1990s while the percentage sold by grocery stores has declined. Price and the ability to buy items in bulk, which often are related, have led more people to shop at these big stores for the food they consume at home."

The bottom line for US and Oregon agriculture is simple- the food product will go to where the market is. No matter where consumers eat their food- at home or away from home- farmers and ranchers make sure that food is available at a reasonable price. Some of that luxury is spilling into other countries where economic growth is taking place and more people have more money. That's all good for agriculture.

"Generally, across the world, incomes are increasing, population is increasing, demand for food is increasing," says Searle. "That means our producers will be busy providing for markets at home and abroad."

For more information, contact Brent Searle at (503) 986-4558 or Bruce Pokarney at (503) 986-4559.
 
 

Story of the Week pdf version
http://oregon.gov/ODA/docs/pdf/news/120523consumption.pdf

Audio Story of the Week
http://oregon.gov/ODA/news/120523consumption_audio.shtml