{
  "id": "R40545",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R40545",
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  "source": "EveryCRSReport.com, University of North Texas Libraries Government Documents Department",
  "versions": [
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      "source": "EveryCRSReport.com",
      "id": 441243,
      "date": "2015-05-11",
      "retrieved": "2016-04-06T19:05:43.169103",
      "title": "Consumers and Food Price Inflation",
      "summary": "The heightened price volatility of global commodity markets in 2008, the devastating U.S. drought of 2012, China\u2019s growing demand for international commodities, and almost routine media reports of daunting world population growth all raise the specter of food price inflation and generate many questions about farm and food price movements. Understanding food price changes and their effects on consumers is an important matter for Members of Congress and their constituents. This report provides information on the current status and outlook for U.S. food prices, measuring their changes and how such changes relate to U.S. consumers. \nDespite the hype associated with media coverage of international catastrophes, historical evidence suggests that prices for retail food products are driven more by consumer demand (strongly linked to general economic conditions), than by price changes in raw commodity markets, although this linkage varies with the degree of raw commodity content in the retail product. For a discussion of the relationship between farm and retail prices, and the major factors influencing farm-level and wholesale food prices, see CRS Report R40621, Farm-to-Food Price Dynamics.\nDuring the 1991 to 2006 period, U.S. food prices were fairly stable\u2014annual food price inflation, as measured by the Consumer Price Index (CPI) for All Food (excluding alcoholic beverages), averaged a relatively low 2.5%. However, several economic factors emerged in late 2005 that began to gradually push market prices higher for both raw agricultural commodities and energy costs, and ultimately retail food prices. U.S. food price inflation increased at a rate of 4% in 2007 and at 5.5% in 2008\u2014the highest since 1990 and well above the general inflation rate of 3.8%. The situation of sharply rising prices came to a sudden halt in late 2008, when the financial crisis led to a severe global economic recession. Annual food price inflation dropped to 1.8% in 2009 and 0.8% in 2010, driven by the global financial crisis and its aftermath. In 2011, improving U.S. and global economic conditions led to a 3.7% rise in average food prices. However, since 2012, food price inflation has averaged 2.5%\u2014due in part to continued sluggish economic growth and stagnant wages, which combined to weaken consumer purchasing power. The U.S. Department of Agriculture (USDA) projects that annual U.S. food price inflation will be in the 2% to 3% range in 2015 compared with 2.4% in 2014. \nFor households with low disposable income levels where food expenditures are a large share of the budget, rising food prices result in diminished purchasing power and may force difficult budgetary tradeoffs. To help food-deficient households during periods of rising prices, many domestic food assistance programs are linked to price inflation through escalation clauses, in order to retain consumer purchasing power during periods of rising food prices. However, even for programs with escalation clauses, a time lag usually occurs between the time the price inflation is measured and the time when the wage or program benefit is adjusted upward to compensate.\nThe All-Food CPI has two components\u2014Food-at-Home and Food-Away-from-Home. The Food-at-Home CPI is most representative of retail food prices and is significantly more volatile than the Food-Away-from-Home index. However, both indexes, Food-at-Home and Food-Away-from-Home, are projected at 2% to 3% for 2015.",
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    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc227643/",
      "id": "R40545_2013Sep13",
      "date": "2013-09-13",
      "retrieved": "2013-11-05T18:07:05",
      "title": "Consumers and Food Price Inflation",
      "summary": "This report is divided into five sections that cover the following: major economic concepts underlying consumer food behavior; descriptions how U.S. food price inflation rates have evolved since 1915, when federal price data collection for inflation-measuring purposes began; information on recent history and projections for U.S. food expenditure shares relative to total household budget; an examination of retail food price inflation; and a discussion on the impact that rapid food price inflation can have on government food programs and the more vulnerable consumer groups.",
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      "topics": [
        {
          "source": "LIV",
          "id": "Food prices",
          "name": "Food prices"
        },
        {
          "source": "LIV",
          "id": "Agricultural prices",
          "name": "Agricultural prices"
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        {
          "source": "LIV",
          "id": "Food",
          "name": "Food"
        },
        {
          "source": "LIV",
          "id": "Consumers",
          "name": "Consumers"
        }
      ]
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    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc810689/",
      "id": "R40545_2012Oct04",
      "date": "2012-10-04",
      "retrieved": "2016-03-19T13:57:26",
      "title": "Consumers and Food Price Inflation",
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      "type": "CRS Report",
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    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc97973/",
      "id": "R40545_2011Apr14",
      "date": "2011-04-14",
      "retrieved": "2012-08-21T08:46:06",
      "title": "Consumers and Food Price Inflation",
      "summary": "This report is divided into five sections that cover the following: major economic concepts underlying consumer food behavior; descriptions how U.S. food price inflation rates have evolved since 1915, when federal price data collection for inflation-measuring purposes began; information on recent history and projections for U.S. food expenditure shares relative to total household budget; an examination of retail food price inflation; and a discussion on the impact that rapid food price inflation can have on government food programs and the more vulnerable consumer groups.",
      "type": "CRS Report",
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      "topics": [
        {
          "source": "LIV",
          "id": "Food prices",
          "name": "Food prices"
        },
        {
          "source": "LIV",
          "id": "Agricultural prices",
          "name": "Agricultural prices"
        },
        {
          "source": "LIV",
          "id": "Food",
          "name": "Food"
        },
        {
          "source": "LIV",
          "id": "Consumers",
          "name": "Consumers"
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    {
      "source": "University of North Texas Libraries Government Documents Department",
      "sourceLink": "https://digital.library.unt.edu/ark:/67531/metadc627118/",
      "id": "R40545_2009Nov04",
      "date": "2009-11-04",
      "retrieved": "2015-06-15T14:46:40",
      "title": "Consumers and Food Price Inflation",
      "summary": "The heightened commodity price volatility of 2008 and the subsequent acceleration in U.S. food price inflation raised concerns and generated many questions about farm and food price movements by Members of Congress and their constituents. This report responds to those concerns by addressing the nature and measurement of retail food price inflation.",
      "type": "CRS Report",
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      "topics": [
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          "source": "LIV",
          "id": "Food prices",
          "name": "Food prices"
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        {
          "source": "LIV",
          "id": "Agricultural prices",
          "name": "Agricultural prices"
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        {
          "source": "LIV",
          "id": "Food",
          "name": "Food"
        },
        {
          "source": "LIV",
          "id": "Consumers",
          "name": "Consumers"
        }
      ]
    }
  ],
  "topics": [
    "Domestic Social Policy"
  ]
}