Food Costs Lower Than Ever in U.S.

Americans are spending a smaller share of their incomes on food than ever before, the Agriculture Department says.

According to the department’s food cost review, Americans overall spent $411 billion on food in 1988--11.8% of their total disposable personal income.

That is down from 13% five years earlier and 13.5% in 1978, the department’s Economic Research Service says. When the government began keeping statistics in 1929, nearly 25% of disposable personal income was spent on food.

That percentage has declined steadily over the years except for the 1970s, when there was relatively high food price inflation, the department says.

Percentage Varies

Citing a 1986 survey by the U.S. Department of Labor, the Agriculture department noted that the percentage of income spent on food varies by size and income of family.

After-tax income spent for food varied from 12.7% for households with incomes of from $30,000 to $39,000, to 27.4% for families with incomes of from $5,000 to $9,999.

Although much has been said about the growing number of meals taken at restaurants and fast-food establishments, the share of disposable income spent on food eaten away from home has risen only gradually: from 3.2% in 1929 to 4.5% in 1988. Expense-account meals are excluded.

The Agriculture Department excludes pet food, ice and prepared feeds, and deducts more for non-food items such as drugs and household supplies in arriving at the food component of grocery bills.

Of the $411 billion spent on food, $395 billion was spent on food produced on American farms. The rest was spent on imported food and fishery products.

The $395 billion represents a 5% increase over the previous year and is a record dollar amount spent by consumers on food produced in America.

Meat products accounted for 29% of total expenditures, followed by 22% for fruits and vegetables.