Food Prices and Spending

Average annual food-at-home prices were 5.0 percent higher in 2023 than in 2022. For context, the 20-year historical level of retail food price inflation is 2.5 percent per year. Price growth slowed in 2023 compared with 2022, when food-at-home prices rose by 11.4 percent. Prices for fats and oils rose the fastest in 2023 (9.0 percent), followed by sugar and sweets (8.7 percent), and cereals and bakery products (8.4 percent). Pork was the only category to decline in price in 2023, by 1.2 percent. Prices for several categories grew more slowly than their historical averages, including beef and veal (3.6 percent), eggs (1.4 percent), fresh vegetables (0.9 percent), fresh fruits (0.7 percent), and fish and seafood (0.3 percent).

From 2019 to 2023, the all-food Consumer Price Index (CPI) rose by 25.0 percent—a higher increase than the all-items CPI, which grew 19.2 percent over the same period. Food price increases were below the 27.1-percent increase in transportation costs, but they rose faster than housing, medical care, and all other major categories. Food price increases in 2020–21 were largely driven by shifting consumption patterns and supply chain disruptions resulting from the Coronavirus (COVID-19) pandemic. In 2022, food prices increased faster than any year since 1979, partly due to a highly pathogenic avian influenza outbreak that affected egg and poultry prices and the conflict in Ukraine which compounded other economy-wide inflationary pressures such as high energy costs. Food price growth slowed in 2023 as wholesale food prices and these other inflationary factors eased from 2022.

For a typical dollar spent in 2023 by U.S. consumers on domestically produced food, a combined 26.1 cents went to wholesale (11.4 cents) and retail (14.7 cents) trade establishments such as grocery stores, wholesale clubs, restaurant supply stores, and other food distribution outlets. After reaching a series high at a combined 28.2 cents in 2020, both the wholesale and retail trade shares have remained above their series averages of 10.6 cents and 13.9 cents, respectively. In 2023, food services was 31.5 cents, and food processing continued its trend downward to 13.2 cents, its lowest share since 1993, the first year recorded in the series.

Corn, wheat, and soybeans are the top three U.S. field crops and comprise the majority of field crop inputs to the U.S. food supply. The average farm price of these crops, weighted by total production, regularly rises or falls by more than 10 percent from one year to the next. However, these price swings have relatively small impacts on food prices. In 2023, the production-weighted price of these crops fell by 12.1 percent, while food prices increased by 5.8 percent. Intermediate foods and feeds price fluctuations generally fall between swings in field crop and food prices.

Food and fuel prices are typically more volatile than other consumer spending categories, but the price swings differ in size. Over the past two decades, motor fuel prices often experienced double-digit annual price swings, and the average annual change in food prices (3.0 percent) was lower than household energy (3.3 percent) and motor fuel prices (5.9 percent). In 2023, food prices grew by 5.8 percent, while household energy prices increased by 1.6 percent and motor fuel prices declined by 10.6 percent following relatively large increases for each of these categories in 2022.

In 2023, nominal (i.e., not adjusted for inflation) food expenditures by U.S. consumers, businesses, and government entities reached $2.6 trillion, up from $2.4 trillion in 2022. This increase was mainly driven by growth in food-away-from-home spending, climbing from $1.3 trillion in 2022 to $1.5 trillion in 2023. Meanwhile, food-at-home spending increased from $1 trillion in 2022 to $1.1 trillion in 2023. Food-away-from-home expenditures accounted for 58.5 percent of total food expenditures in 2023—their highest share of total food spending observed in the series.

U.S. consumers spent an average of 11.2 percent of their disposable personal incomes on food in 2023, unchanged from 2022. However, there were notable shifts in the composition of food spending. From 2022 to 2023, consumers’ budget share allocated to food-at-home spending decreased from 5.6 percent to 5.3 percent, while the share allocated to food-away-from-home spending increased from 5.6 percent to 5.9 percent. In 2023, the share of income spent on food-away-from-home reached its highest point since the series began, reflecting the ongoing upward trend observed prior to the Coronavirus (COVID-19) pandemic.

As their incomes rise, U.S. households spend more money on food, but it represents a smaller share of their income. In 2023, households in the lowest income quintile spent an average of $5,278 on food (representing 32.6 percent of after-tax income). Households in the middle income quintile spent an average of $8,989 on food in 2023 (representing 13.5 percent of after-tax income). In 2023, households in the highest income quintile spent an average of $16,996 on food (representing 8.1 percent of after-tax income).

High-income countries such as the United States and the United Kingdom have higher food spending in absolute terms, but the share of household consumption expenditures devoted to at-home food is low—less than 10 percent. In Kenya and other low-income countries, at-home food’s share of consumption expenditures can exceed 50 percent. Per capita calorie availability follows the reverse pattern. According to the most recent available data, U.S. per capita calorie availability was among the highest at 3,864 calories per person per day, while Kenya’s was estimated at 2,201 calories per person per day.