07/25/06 Food is a bargain

Food remains a bargain. I'm Greg Martin with today's Line On Agriculture. The U.S. consumer is spending a bit more of their disposable income to purchase food than the previous year, but they still enjoy the cheapest, most abundant food supply in the world. And even though your grocery bill or restaurant tab may sometimes seem too high, but be thankful. New statistics from the U.S. Department of Agriculture show that Americans are spending comparatively less of their paycheck than others for food these days: SEARLE: The U.S. is a real bargain when it comes to food. Compared to other countries that are in the 20, 30, 40 percent of their disposable income sent on food, 10 percent is a real good deal. Analyst Brent Searle of the Oregon Department of Agriculture says the actual figure of 9.9 percent last year is just a bit higher than in 2004. But it still looks good when you go back in history: SEARLE: We really saw the decline in disposable income for food start about 1950. Before that, it was greater than 20 percent in the United States. So we`ve cut that in half and that came about with the advent of modern commercial agriculture. Consumers in other countries like India and Indonesia spend nearly half of their disposable income on food. U.S. consumers can thank the productivity and efficiency of America`s farmers and ranchers, in large part, for the great bargain. Searle says the latest statistics show about 49 percent of food expenditures are made out-of-the home, such as restaurants, with 51 percent spent on food to be consumed at home: SEARLE: We saw the portion that was spent for out-of-home food go up during the 90s quite a bit almost equal to food consumed in the home. Then it backed off a little bit after 9/11 a few years ago. Searle says Americans are paying, on average, less than 10 percent of their disposable income on food and that`s not bad: SEARLE: When any of us go to the store and buy food, like anything else, we look at the check register there and feel like we`re spending money more than we`d like. But in terms of comparison to other countries, comparison to the past, food costs right now are still a bargain. While the low percentage spent on food is good news for American consumers, it has not necessarily translated well to the producer. On average, farmers get back less than 20 cents of every dollar paid by the consumer. The balance primarily goes to processors, wholesalers, and retailers. That's today's Line On Agriculture. I'm Greg Martin on the Northwest Ag Information Network.