Sunday, April 04, 2010

Happy Easter: Enjoy the Cheap Eggs and Food!

The chart above shows the real, inflation-adjusted wholesale prices of eggs (in 2009 dollars), annually back to 1890. The wholesale price we're paying today for eggs (about $1 per dozen) is about 1/10 of the price 100 years ago ($10 per dozen in today's dollars), a decline of 90% compared to the price American consumers paid in the early 1900s.

And it's not just egg prices that have fallen over the last 100 years. Food (both at home and away from home) as a share of disposable income has never been more affordable, see the chart below using USDA data through 2008. Food expenditures as a percent of disposable income were in double-digits for the entire 20th century, and were above 20% for most of the 1929-1952 period. It's only been since 2000 that spending on food has fallen below 10% of disposable income, and it reached an all-time historical low of 9.6% in 2008.

And compared to other countries, Americans are the luckiest consumers on the planet when it comes to the affordability of food, measured as a share of income (data here). Most European consumers spend twice as much on food consumed at home as a share of income (e.g. 13.7% in France, 14.5% in Italy) as Americans (5.7%), and consumers in Mexico (24.2%), Chile (23.4%) and Brazil (24.6%) spend about three times as much as we do.

Happy Easter, enjoy your cheap eggs and food and be thankful for your status as one of the luckiest consumers in the world.

9 Comments:

At 4/04/2010 10:25 AM, Anonymous Anonymous said...

...of course in 1929 most of the country grew much of their own food, and were not included in the data...which makes your comparative analysis at minimum, skewed, and most likely irrelevant.

 
At 4/04/2010 11:06 AM, Blogger xcaverx said...

..of course in 1929 most of the country grew much of their own food, and were not included in the data...which makes your comparative analysis at minimum, skewed, and most likely irrelevant.

It seems to me that the comparison becomes more dramatic, if the data don't account for the real cost of all those home-produced groceries. What am I missing, anonymous?

Would you also say that most of the country were producing much of their food in 1950?

 
At 4/04/2010 11:15 AM, Blogger Cabodog said...

Cost of food inversely proportional to our waistline measurements?

 
At 4/04/2010 2:23 PM, Anonymous Benny The Man said...

Well, not sure what this means.

Our agriculture sector is the most subsidized and regulated of any sector of the economy. Production levels are federally controlled (although states also control crop output), ag schools subsidized, and there are 7,000 federal agriculture extension officers whose only job it is to assist farmers. Last year $60 billion in crop subsidies. Some farmers are paid not to grow crops. In Montana, farmers get more from the federal government than they get from private-sector buyers.

There is no more mollycoddled, enfeebled, knock-kneed and subsidized sector of the economy than agriculture. It is a full-on tribute to big government and socialism.

In addition, almost the whole of rural infrastructure is subsidized by urban residents, including rural highways, water systems, power systems, telephone service, rail stops, and airports. Oh, and postal service. No private carrier would bring an envelope from Smokepot, AZ to Red Bluff, MT for 45 cents.

Oddly enough, the right-wing continues to lionize the pinko-agriculture sector, for reasons that elude me. We see Dr. Perry and his occasional rhapsodizing about food prices in America--Hubert Horatio Humphrey would be proud. You may get cheap produce, but you pay at tax time--except taxes are not voluntary, and private transactions are.

Farm and rural subsidies have become a pillar of the Republican Party and the Red State Socialist Empire.

I predict the Tea Partiers will carefully overlook this reality when bashing government borrowing and intrusion into the private sector.

 
At 4/04/2010 10:25 PM, Blogger Marko said...

Aren't many of the price controls and subsidies (such as to farmers not to produce certain items) intended to increase the cost of food? I suspect that without as much government interference, the price of food would be even cheaper, which makes Dr. Perry's point even stronger. I don't recall which produce is not regulated, but from what I remember the unregulated, unsubsidized vegetables (green beans?) have dropped in price even more, so the point stands that increases in productivity and market forces have made life better and cheaper for Americans.

 
At 4/04/2010 10:50 PM, Blogger Marko said...

Here is an article from a couple of years ago I found in a couple seconds about how government subsidies (to certain crops) prevent farmers from growing vegetables locally.
http://www.nytimes.com/2008/03/01/opinion/01hedin.html

So, prices are going down in spite of the feds trying to keep prices up! So, instead of this showing that conservatives are wrong for arguing how the markets keep prices low for produce, it shows that the market is so powerful it can sometimes even overcome federal hijinks.

 
At 4/05/2010 10:58 AM, Blogger xcaverx said...

Here is the full NYT link:
http://www.nytimes.com/2008/03/01/opinion/01hedin.html?scp=1&sq=2008/03/01%20opinon&st=cse

 
At 4/05/2010 11:34 AM, Anonymous Benny The Man said...

Marko-

I agree with you.

Dr. Perry should run this post instead on May Day--call it, "Cheap eggs brought to you by the Red State Socialist Empire--except they would be cheaper under free enterprise."

 
At 4/06/2010 2:16 AM, Blogger Ron H. said...

>"Benny The Man said...

Well, not sure what this means".


That makes at least 2 of us. Your comment starts out clearly enough, but about halfway through it started to lose meaning.

Did sethstorm write this for you?

 

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