Monday, November 15, 2010

Monday wonkery: A close look at food price inflation, or lack thereof 

Invictus at The Big Picture takes a look at food price inflation and deflation as calculated by the government. Incidentally to the main point of the post, there is a very interesting chart showing "food at home" (meaning groceries) as a percentage of the American household budget. It has fallen from about 20% when I was born to maybe 7% now, which has effectively liberated a huge proportion of household income (which has itself risen considerably) to spend on fun and games. Or, of course, housing and health care.

Collateral point to irritate many of my crunchy friends: The next time you hear somebody denounce, or you yourself denounce, factory farming, consider your awesome kitchen and your ICD and your television bill and your iPhone and wonder whether you could still afford them if you were spending 20% of your income on groceries. The answer is "probably not."


By Anonymous Kirk Petersen, at Mon Nov 15, 08:13:00 AM:

OK, I'll bite: What's an ICD? None of these suggestions from an online acronym directory seem right:

ICD Implantable Cardioverter Defibrillator
ICD International Classification of Diseases
ICD In-Circuit Debugger
ICD IED (Intelligent Electronic Device) Capability Description
ICD International Statistical Classification of Diseases and Related Health Problems
ICD Interface Control Document
ICD Institute of Corporate Directors
ICD Inland Container Depot
ICD Isocitrate Dehydrogenase
ICD International Code Designator
ICD Initial Capabilities Document
ICD Injuries and Causes of Death
ICD Installable Client Driver (OpenGL)
ICD Indian Creek Designs
ICD International College of Dentists
ICD Informed Consent Document
ICD Implanted Cardiac Defibrillator
ICD Inland Clearance Depot
ICD Interface Control Drawing
ICD Interface Control Documentation
ICD Industry Council for Development (UK)
ICD Institutes, Centers, and Divisions (US NIH)
ICD Immune Complex Dissociated
ICD Interatomic Coulombic Decay
ICD Internet Call Diversion
ICD Implantable Cardioverter Device
ICD Interconnect Devices
ICD International Common Denomination (medicines)
ICD Improvised Chemical Device
ICD Installation Control Drawing
ICD International Cooperation and Development Program (USDA)
ICD Internet Call Display
ICD Imitative Communication(s) Deception
ICD Initial Conceptual Design
ICD Intelligent Call Delivery
ICD Interface Control Diagram
ICD Incordex
ICD Integrated Communication Device
ICD Association Internationale des Maîtres Coiffeurs de Dames
ICD Input Configuration Document
ICD Initial Communications Deception
ICD Inheritance Contractual Dependency
ICD Fundación Instituto de Cooperación al Desarrollo
ICD Inline Cache Database
ICD Industrial Council for Development
ICD Interconnect Drawing
ICD Israelis for Constitutional Democracy
ICD International Convention on Desertification (signed 1994)
ICD Installation Control Document
ICD Interim Conceptual Design
ICD Interim Capability Document
ICD Inscribed Circular Diameter (civil enginnering)
ICD Interim Checkout Device
ICD Internal Computerized Device
ICD International Cooperative Division  

By Blogger TigerHawk, at Mon Nov 15, 08:15:00 AM:

The first one! A reference to health care costs.  

By Blogger Don Cox, at Mon Nov 15, 08:24:00 AM:

I don't know about the US, but food prices here in Britain have been rocketing up over the past couple of years.

Fuel prices (both gas and electricity) even more so.  

By Blogger JPMcT, at Mon Nov 15, 08:56:00 AM:

Not everybody agrees that inflation is not making a comeback.  

By Anonymous E Hines, at Mon Nov 15, 08:57:00 AM:

...food prices here in Britain have been rocketing up over the past couple of years.

I plead guilty to a large degree of ingnorance on the structure of the British economy, but here are some possible linkages:

Fuel price increases experienced by the farmer, by the shipper, by the granaries doing storage, by the final sellers.

Import/export tariffs in an increasingly protectionist globe in the current economic unpleasantness

Competition for grains used for food and for biofuels

Eric Hines  

By Anonymous Dennis, at Mon Nov 15, 09:56:00 AM:

I believe household income is reported as gross and family groceries are paid for out of net receipts. Therefore, I suspect that graph wouldn't be so dramatic if HI was only that money that actually ends up in my hands to spend. I suspect it would still show a drop and TH has hit on the reason - factory farms and the transportation system.

You can certainly buy better food, better diversity of food and buy it year round than when I was a kid in the 40's and 50's ---- and we had a large farm garden.

On the other hand my wife and I don't buy fresh fish or the choice(er) cuts of beef because we can't afford it. Ranchers around here are getting $.98 to $.99 a pound for cattle; steak costs $5.80 and up.

I note that in buying items for Thanksgiving last night, canned fruits and produce have gone up markedly and the turkey is up about 30% over last year. Closing down the Central Valley in California for a minnow (which apparently isn't edible) probably contributed to that.  

By Anonymous Anonymous, at Mon Nov 15, 01:26:00 PM:

The link JPcT posted, to the CNBC report on Walmart's new inflation tracking index, is well worth reading. Maybe I'm overly cynical, but Walmart saying government reports of non-existent inflation aren't persuasive should be a big story.  

By Anonymous Anonymous, at Mon Nov 15, 09:59:00 PM:

25% of our net income is groceries since our fall from middle class america. We aren't all living the high life these days.  

By Anonymous feeblemind, at Mon Nov 15, 10:53:00 PM:

Your comments are quite correct TH. Post WWII prosperity was founded largely on cheap food and cheap energy. The cheap energy is gone alas, due mainly to political interference.  

By Blogger Progressively Defensive, at Tue Nov 16, 11:42:00 AM:

And the poor are 6x more likely to be obese, raising their health care costs. We are eating TOO MUCH.

OK, family of four living in a lower-middle income neighborhood very small 3 BR house (2000 sf, one story), in Texas. $15,000/year to live comfortably theoretically I say; right? Virtually everything is free except for food, housing, heat, clothing, and health care.  

By Blogger JPMcT, at Wed Nov 17, 12:27:00 PM:

"And the poor are 6x more likely to be obese, raising their health care costs. We are eating TOO MUCH."

The "poor" tend to have diets higher in carbs and, let's face it, far less daily activity.

That cannot be helped by restricting Kid's Meals, offering more food stamps or expanding unemployment benefits into the welfare zone.

Getting off one's ass and having intelligent, responsible eating habits is simply not legislatable.  

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