Carpe Diem

When it comes to spending on food as share of total consumer expenditures, Americans have the most affordable food on the planet, and it’s gotten better over time

food

foodnewThis is an update of a Carpe Diem post from about a year ago that generated a lot of comments, so it appears again here with new international data for 2012 from the United States Department of Agriculture’s Economic Research Service on consumer spending on food in various countries around the world.

We hear reports all the time that real household incomes in the US are stagnant or falling, America’s middle class is disappearing, household wealth has declined, income inequality is rising, and various other stories of pessimistic gloom and doom. All of those reports might make one think that the standard of living for the average American is bad and getting worse. But here’s one basic measure of a country’s standard of living that shows Americans are better off than their consumer counterparts anywhere in the world: The share of consumer expenditures spent on food consumed at home. The table below displays rankings of 84 countries, from the lowest to highest share of consumer expenditures spent on food at home in 2012.

Relative to our total consumer spending per capita, Americans have the most affordable food on the planet — only 6.6% of consumer expenditures go to food consumed at home. European countries like Spain, France, Belgium, and Norway spend twice that amount on food as a share of total consumer expenditures, and consumers in countries like Turkey, China, and Mexico spend three times as much on food at home relative to total consumer expenditures compared to Americans.

Notice that consumer spending per person in Switzerland ($44,899) is about 30% higher than in America ($34,541), and the Swiss spent about twice as much on food per person in 2012 ($4,943) as Americans ($2,215), so their spending on food (11%) was higher than in America (6.6%). In Brazil, consumers spend only about half as much on food as Americans ($1,123 vs. $2,215), but as a share of consumer expenditures per person in Brazil ($7,063), spending on food is almost 2.5 times higher there (~16%) than here (6.6%).

How has spending on food as share of total consumer expenditures changed over time? The top chart above displays the historical shares of consumer expenditures spent for food at home back to 1929, using data from the Bureau of Economic Analysis (slightly different than the USDA data, which is not available before the most recent few years), and shows that spending on food as a share of total consumer expenditures has steadily trended downward, from a high of almost 25% during WWII, to less than 8% over the last decade. For those who think that the 1950s were the “golden age of America’s middle class,” it sure wasn’t so “golden” for food affordability – the share of consumer spending on food at home in the early 1950s was above 22%, or almost three times the 7.6% average share over the last decade. During the 1960s and through the first half of the 1970s, Americans spent roughly twice as much on food as a share of total consumer spending compared to today.

Update: The second chart above has been added in response to several comments that the international USDA data in the table below only includes food consumed at home, and not food consumed away from home at restaurants. The USDA provides another measure of food affordability for the US that goes back annually to 1929 and that measure is total consumer spending on food (both at home and away from home) as a share of disposable personal income, that measure of food affordability is displayed annually from 1929 to 2012 (data here in Table 7) in the bottom chart above. From a peak of above 25.2% in 1933, the share of disposable personal income spent on all food purchases has steadily declined over time has about 10% over the last decade. During the alleged “golden era of the middle class” in the early 1950s, the share of personal income spent on food was above 20%, more than twice the share today. During the decade of the 1960s, the average share of income spent on all food was above 15%. Therefore, even when food away from home is included, there is still a long term downward trend in the share of consumer spending on all food as share of disposable personal income.

For the increasing affordability of food over time for Americans as a share to total consumer expenditures, and for America having the world’s most affordable food as a share of consumer spending for decades, we can thank the innovation, technological advances, and ever-greater supply-chain and distributional efficiencies that drive America’s farming industry, which in turn drive down food prices relative to other goods and services and relative to our income. When it comes to food affordability, the “golden age of America’s middle class” is today, and certainly not decades in the past like the 1950s, 1960s or 1970s.

Rank, 2012 Country % of Consumer Spending on Food at Home, 2012 Consumer Spending, per Capita Spending on Food at Home, per Capita
1 United States 6.6% $34,541 $2,215
2 Singapore 7.3 19,398 1,422
3 U.K. 9.1 24,260 2,214
4 Canada 9.6 27,761 2,679
5 Austria 10.1 25,908 2,617
6 Ireland 10.1 20,093 2,037
7 Australia 10.2 37,492 3,814
8 Germany 10.9 22,762 2,481
9 Switzerland 11.0 44,899 4,943
10 Denmark 11.1 27,306 3,036
11 Netherlands 11.6 20,625 2,388
12 Finland 12.0 24,927 3,001
13 Qatar 12.1 11,199 1,361
14 Sweden 12.2 26,146 3,193
15 South Korea 12.2 12,002 1,468
16 Norway 13.2 37,146 4,885
17 France 13.2 22,945 3,037
18 Czech Republic 13.3 9,643 1,279
19 Hong Kong 13.4 24,060 3,224
20 Taiwan 13.5 12,247 1,657
21 Japan 13.8 27,761 3,818
22 Belgium 13.8 22,208 3,075
23 Bahrain 13.9 10,200 1,422
24 Spain 14.0 17,713 2,483
25 Italy 14.2 20,362 2,892
26 UAE 14.3 21,206 3,024
27 New Zealand 14.6 22,448 3,284
28 Slovenia 15.3 13,858 2,125
29 Brazil 15.9 7,063 1,123
30 Israel 15.9 17,491 2,783
31 Hungary 16.2 6,972 1,127
32 Chile 16.2 9,566 1,546
33 Greece 16.5 16,652 2,740
34 Portugal 16.5 13,473 2,225
35 Slovakia 16.8 9,556 1,603
36 Uruguay 18.3 10,272 1,878
37 Colombia 18.4 4,744 872
38 Kuwait 18.6 7,284 1,352
39 Venezuela 18.6 7,421 1,378
40 Latvia 18.8 8,612 1,619
41 South Africa 19.4 4,524 877
42 Malaysia 19.5 5,557 1,084
43 Poland 19.6 7,773 1,521
44 Estonia 19.6 8,923 1,753
45 Argentina 20.9 6,595 1,381
46 Bulgaria 21.2 4,718 999
47 Ecuador 21.9 3,526 771
48 Turkey 22.2 7,705 1,708
49 Costa Rica 23.3 6,754 1,577
50 Turkmenistan 23.5 2,503 589
51 Dom. Republic 24.5 5,192 1,272
52 Mexico 24.9 6,518 1,625
53 India 25.2 871 220
54 Iran 25.5 2,744 699
55 Lithuania 25.7 9,067 2,331
56 Saudi Arabia 25.8 6,220 1,607
57 China 26.9 2,149 577
58 Romania 28.6 4,827 1,382
59 Bolivia 28.7 1,567 450
60 Uzbekistan 31.0 908 281
61 Croatia 31.4 9,078 2,847
62 Bosnia- Herz. 31.4 4,057 1,275
63 Russia 31.6 6,709 2,120
64 Thailand 32.0 3,177 1,016
65 Jordan 32.2 3,743 1,205
66 Indonesia 33.4 1,964 655
67 Macedonia 34.4 3,626 1,247
68 Kazakhstan 35.1 5,483 1,925
69 Tunisia 35.5 2,660 943
70 Vietnam 35.9 962 345
71 Belarus 36.1 3,091 1,115
72 Peru 36.5 4,126 1,507
73 Ukraine 37.0 2,779 1,028
74 Guatemala 37.9 2,878 1,091
75 Nigeria 39.5 966 381
76 Georgia 40.4 2,663 1,076
77 Morocco 40.5 1,921 777
78 Azerbaijan 42.7 2,862 1,222
79 Egypt 42.7 2,410 1,030
80 Philippines 42.8 1,925 823
81 Algeria 43.7 1,749 764
82 Kenya 44.8 782 350
83 Cameroon 45.9 921 423
84 Pakistan 47.7 871 415

12 thoughts on “When it comes to spending on food as share of total consumer expenditures, Americans have the most affordable food on the planet, and it’s gotten better over time

  1. Disgusting junk food swimming in animal fats, apples that taste like cotton wool, tomatoes that taste like nothing at all thanks to the quantities of water forced into them to make them bigger (ditto strawberries), force-fed beef, bland, featureless chicken, bread that tastes like cardboard. It may be affordable, but you can have my share!

    • Interesting perspective, Robert, are you able to get the good stuff anywhere? Or is it all lost to a mythical age when men were men and the grass was green? ;) More seriously, why do you think the much more tasty food you prefer isn’t sold much, at Whole Foods or somewhere, assuming it can still be bought someplace?

  2. I think people often forget the greater variety of fresh food available now than 40 years ago. 40 years ago fruits for example had a season (depending on weather) and were available for a limited time. An example I recall were that strawberries where a spring fruit. My mother recalled that when she was growing up an orange went into a christmas stocking. (All be it they became available at a price to anyone in the us in the 1880s once the railroads reached LA (the second one so the price of shipping fell, at that time La county was orange land).
    Typically in the winter you had canned fruit and vegetables along with fruits and vegetables that would keep in a root cellar such as apples and potatoes. So today it is the much greater time frame when fresh is available, plus in addition the availability of frozen fruits and vegetables. (That sort of came post WWII).

  3. As others have pointed out on these posts, the titles of the post and chart are misleading, as you are only counting food spending at home, but the titles give the impression you’re talking about all food eaten, including eating out. I suspect it wouldn’t be so affordable once you include restaurant food, as Americans eat out a lot and it isn’t cheap.

    • that’s the same point i was going to make.

      eating out is a substitute for eating at home (and one people choose more frequently as wealth goes up).

      eating out is a luxury good.

      thus, we should expect americans to eat out far more than, say, Brazilians or Turks.

      further, if the trend toward eating out more has increased over time (and it likely has, many who work eat out 2 meals a day at least) then this trend may not be measuring affordability at all, just a change in eating habits. when i lived in sf, i had breakfast and lunch at work every work day and then ate out maybe 4 nights a week and often for brunch or lunch on weekends.

      that’s over 2/3 of meals eaten away from home, and that was hardly an uncommon urban eating plan. (though it was likely far less common in 1950)

      this metric may not mean what is being claimed.

      over the last 10 years, food price inflation has been considerably higher than CPI and growth in income levels, and based on big jumps in the prices of many meats right now, looks poised to continue this trend.

      i am not arguing that the us does not have plentiful, affordable food, but to ignore the fact that food prices have been increasing sharply for decade seems to miss an important aspect of this market, and given the drops in income over the last 5 years, the effects of these price hikes are magnified relative to income.

    • Sprewell and Morganovich: I’ve added a new, second chart showing spending on all food (at home and away from home) as a share of disposable personal income using a different USDA dataset. USDA doesn’t have historical data on all food spending as a share of consumer expenditures, and neither does the BEA. Therefore, I’m showing a different measure of spending on food that includes food away from home as a share of disposable personal income, with the same downward trend.

      As a share of disposable personal income, spending on all food (at home and away from home) has gone from 21% in the early 1950s to less than below 10% in ever year since 2000.

      • thanks.

        i think those are far better metrics to use.

        they capture the full cost of food and eliminate potential issues from substitution and i think that DPI is a better income metric to use than just overall consumption is one is looking at affordability.

        i think your new chart provides for more rigorous proof of your point, though, i suppose one could say that gains have more or less stopped over the last 10-15 years, but that is not necessarily a sign things have stopped getting better.

        it may just mean we are consuming more (and more expensive” meals out and achieving higher utility or that we are eating different foods and that 10% is just a point we tend not to move beneath, choosing to eat better (or just more expensive) foods as substitutes.

      • I think this update clears things up, Mark.

        Although, looking at the new USDA data, they claim that the breakdown of food at home versus outside is 57% to 43%: that sounds pretty high for home to me. Maybe my perspective is skewed since I’ve always lived in towns and don’t cook, so I ate out a lot at various times in my life, but I do wonder how accurate that split is.

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