April Sees Sharp Rise in Food Prices

Low-Income Families Hit Hardest

SOURCE: AP/Al Behrman

These new 3/4 gallon milk containers, on display at a Kroger store in Cincinatti, are being marketed in response to reports that consumers are buying smaller sizes of food to avoid paying as much money at one time. The price of milk has increased 13.5 percent since last year.

By David Kane | May 15, 2008

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As international leaders debate the causes of the current food crisis, families around the world are still struggling to put food on the table. New data released yesterday by the U.S. Department of Labor indicate that prices for food eaten in American homes increased by 1.5 percent in April alone, a change more than seven times greater than the 0.2 percent increase during the previous month.

The prices of nearly all major grocery products, including meats, dairy, eggs, and fresh produce, also increased faster last month than during any other month this year. Fruits and vegetables, which rose just 0.1 percent in March, increased by 2 percent in April. After declining slightly in March, dairy prices were up 1.2 percent last month. And milk alone has increased 13.5 percent since last year. American families are now paying 5.9 percent more today for the same groceries that they purchased just one year ago.

When prices for all consumers increase, low-income families in the United States are hit hardest. Even during times of normal food price inflation, poor families often pay more for groceries. The USDA estimates the cost of a nutritious diet for low-income households in its Thrifty Food Plan, the measure it also uses to determine food stamp allotments each year. Average food prices between March 2007 and 2008 increased by 4.7 percent, but the Thrifty Food Plan for a family of two went up by an average of 5.8 percent—a disproportionately larger increase in food costs for low-income families.

Facing these higher prices, working families continue to turn to strained food banks for assistance. As more and more households are unable to afford rising energy and food costs, some communities are seeing their food stamp enrollment levels swell. But even those who receive assistance are finding that the available help is not enough, as they exhaust their food stamp benefits earlier each month.

For low-income seniors with fixed incomes, unpredictable and quick price increases may force them to cut back. In families with children, who already make up the majority of food stamp recipient households, increased food insecurity that may result from higher prices can have serious health consequences. And as prices of healthy food options increase, some predict that these high costs will force families to purchase cheaper, but less healthy, food items, potentially worsening the obesity epidemic.

The price of food eaten at home, which has already risen 2 percent since January of this year, is almost halfway toward exceeding the government’s forecasted yearly increase of between 4 percent and 5 percent. While the current farm bill includes changes that will help food stamps keep up with inflation in the long-term, many overdue improvements to the federal nutrition programs won’t reach families until benefits are adjusted, as they are every year, in October. The unchanged system of calculating already inadequate benefit levels will cause allotments to continue to lag behind inflation by up to 16 months. Should prices maintain the current rate of increase, the challenges for low-income families struggling to meet their food needs will continue to grow.

For more information on the Center’s policies on low-income families and the food crisis, see:

• From Poverty to Prosperity: A National Strategy to Cut Poverty in Half
• Food Crisis 101: Causes and Solutions to the Crisis
• We Are Hungry: Solving the Food Crisis at Home