Consumers Paid More for Food in 2011, CPI Data Show

Penny Starr | December 22, 2011 | 8:02pm EST
Font Size

(Photo: Starr)

( – The latest data from the Bureau of Labor Statistic (BLS) show that despite some decreases in the price of certain types of food, U.S. consumers paid more to eat overall in 2011.

According to a Dec. 16 Consumer Price Index (CPI) Summary from the BLS, the index for “food at home” overall has risen 5.9 percent over the past 12 months, with “all six major grocery store food groups up at least 4.4 percent.”

The six major grocery store food groups are: cereal and bakery; meat, poultry, fish, and eggs; dairy and related food items; fruits and vegetables; non-alcoholic beverages; and other food at home, such as spices.

The CPI Summary further shows, for comparison, that “food at home” seasonally adjusted rose 0.5 percent in May 2001; 0.2 percent in June; 0.6 percent, July; 0.6 percent, August; 0.6 percent, September; 0.1 percent, October; and then declined 0.1 percent for November. But overall unadjusted for the last 12 months, the “food at home” CPI rose 5.9 percent.

The index for “food away from home” – food from fast-  or full-service restaurants – also increased in November, up 0.3 percent, after rising 0.2 percent in October, and “has risen 2.9 percent over the past year” overall unadjusted for the seasons, said the BLS.

As for decreases in specific groups, the fruits and vegetables index, which fell 1.7 percent in October, declined 0.6 percent in November, and the index for dairy and related products fell 0.3 percent last month.

(Photo: Starr)

The CPI “is a measure of the average change in prices over time of goods and services purchased by households,” and is important because it is “the most widely used measure of inflation,” according to the BLS.

Using a “basket of goods” approach, the CPI is calculated by taking price changes of each item in the basket, averaging them and then weighting that average based on the importance of goods and services to consumers. The CPI uses a base year of cost for its comparisons and calculations.

With that methodology, the data show that the CPI for “food and beverages” for “all urban consumers” and “not seasonally adjusted,” rose from 219.729 in January 2009 – when Barack Obama was inaugurated – to a level of 230.656 in November 2011, an increase in that CPI category of 10.927.

That CPI measurement category went down slightly in late 2009 but was on the rise again in March 2010. For a longer time span comparison, that same CPI measurement was at 175.2 in November 2001 and hit 218.752 in November 2008, when voters elected Obama.

The CPI Average Price Data table, which is different than the CPI Summary, provides a “snapshot” of the price that consumers pay for specific foods. The price does not reflect the exact price of items on grocery store shelves, but rather the average price of a food item based on the collection of prices in stores around the country.

(Photo: Starr)

Accordingly, the average cost of one pound of 100 percent ground beef went from $2.03 in January 2001 to $3.91 last month, an increase of 92.6 percent. One gallon milk was $2.82, on average, in January 2001, and it is $3.55 today – an increase of 25.8 percent.

One pound of coffee was $3.22 in January 2001 and today it is $5.63 per pound, on average – an increase of 74.8 percent.

According to the CPI, the highest average seasonally adjusted percent increase in food over the past decade came in October 2008, which saw a 6.3 percent rise in index levels. This past year has seen the largest increases since 2008, with index levels showing a gradual increase from 1.8 percent in January 2011 to 4.7 in October. November’s percentage dropped by 1/10 of 1 percent to 4.6 percent, according to CPI’s latest figures.

Ricky Volte, research economist with the United States Department of Agriculture, said that weak economic growth has led more consumers to buy food at the grocery store and prepare it at home rather than going out to eat. This has increased demand for “food at home,” which has increased prices, Volte said.

Volte said more factors contribute to the rise and fall of the price of “food away from home, which is reflected in a lower increase than for “food at home.”

Overall, the factors that drive prices have had a “more tangible affect on food at home prices,” Volte said.

mrc merch