Food prices over time
Date posted: October 5, 2012
Because of the Midwest drought, the government says food prices are expected to rise the rest of this year as well as next year. Still, food is very much a bargain when viewed over several decades, says N.C. State University economist Mike Walden.
“Well , let’s look at what food prices have done going back to 1929. Now why do I choose 1929? Well, it’s (because) easily available data from the government go back that far. From 1929 to 2011, food prices on average went up 551 percent.
“Now that seems like a tremendous increase. And of course most people look at that and say, ‘My gosh, food has become so expensive!’ But, let’s look at a couple of other things: If we look at all prices, the prices of everything from 1929 to 2011, they went up 1,216 percent. So, food prices actually went up less than half of what all prices did.
“Here’s the clincher, though: If we look at income per person, so called per capita income from 1929 to 2011 — now this is average for the average person — per capita income over that time period went up 5,230 percent. So food prices went up at a rate one-10th as much as per capita income.
“So, based on that, you can say that, yes, food prices have gone up over the last several decades, but as a percent of what people have to spend — their income — they’ve gone up much, much less.”
Category: Economic Perspective