An analysis of the recent drop in grocery prices, their effects on the overall food economy, and how they may affect future food-at-home price inflation for consumers.
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Food, on average, is the third largest consumer spending category behind housing and transportation, and rising food prices can have a significant effect on consumers’ pocketbooks. Fluctuations in food prices may trigger changes in the foods consumers buy, and these demand shifts have implications throughout the U.S. food system—from the farmer to the grocery store and restaurant. …
While herd size is not the only factor that matters for production costs, these scale-related cost differences are important. As a result, larger farms are more likely to realize positive net financial returns to milk production, even though their average revenues per hundredweight of milk produced are, on average, somewhat smaller than the revenues of smaller farms. …
The Coronavirus (COVID-19) pandemic led to significant changes in U.S. consumers’ food spending patterns in early 2020, with a return to pre-pandemic spending patterns that continued through 2021. While closures of restaurants and nonessential businesses contributed to record unemployment increases during March and April 2020, unemployment fell to below pre-pandemic levels by December 2021. Although income and employment improved, some U.S. households continue to face difficulties obtaining adequate food, particularly in the face of increasing food prices. …
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