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States seeing the largest increase in spending on food as prices skyrocket 25% in four years
For the first time in several decades, Americans are seeing a significant increase in the portion of their budgets dedicated to buying food.
That's according to a recent study from the Department of Agriculture's research arm, a finding that bucks a long-term trend in which advancements in food processing and production have kept food prices low enough to be a relatively minimal expense in household budgets over the decades. New variables including climate change, war, disease, a rapidly rising cost of living, and surging corporate profits are pushing grocery and restaurant costs higher and higher for American consumers.
Top Nutrition Coaching analyzed USDA data to see where higher food costs were leading to the largest increases in spending across the U.S. from 2019 to 2023.
Food costs increased 25% nationwide in only four years, according to the USDA. And studies suggest that the rise has had a disproportionately more extreme impact on Black families. Compared to white Americans, Black families tend to have less wealth, and necessities like groceries, electricity, and transportation costs consume a larger portion of their budgets. When the prices of those things rise, they can have an outsized impact.
Rising prices haven't had a uniform impact geographically, either. The surge in costs has thus far hit states in the Western U.S. hardest.
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The largest jump in food prices in decades hits grocery spending
Utah, Nevada, Tennessee, Idaho, Maryland, Florida, and California have seen the largest increases in food spending on groceries since before the pandemic. By and large, Midwestern states have experienced the least extreme increases in per-person spending, reflecting less dramatic price increases. The so-called Corn Belt states may have seen less of the price pressure as states further from agricultural production, where higher gas prices and labor costs factored heavily into inflationary pressures of the last few years.
So far in 2024, encouraging trends in grocery store prices could spell relief for consumers. Price hikes have begun to moderate in recent months as consumers have stopped buying as much food as they were in recent years.
However, slowly rising prices do not mean prices will come down significantly—something that rarely happens at a broad level even if prices on specific items decrease somewhat. Growing evidence suggests the new normal is taking a toll on American households.
A recent survey from Intuit Credit Karma suggests that more than 1 in 4 households are skipping meals occasionally because of rising food costs. And 1 in 3 report that those rising prices are part of what's pushing their essential living expenses to 60% or more of their incomes. Families also report making compromises in order to make food costs fit their budget, with roughly a quarter reporting they've settled for buying unhealthy food because it's more affordable.
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Price increases drive higher restaurant spending in the West
The Credit Karma survey also found that less than one-third of Americans have noticed rising prices at restaurants, compared to about 4 in 5 who have noticed an uptick in grocery costs.
The total cost of restaurant meals has increased due to the higher costs for food, which impact restaurants as much as they do individual consumers. But beyond the rising costs that restaurants pass on to their guests, the cost of dining out is up for another reason: a worker shortage in the hospitality industry.
Americans have demanded higher wages to offset inflation elsewhere, like in housing. The labor shortage in the restaurant industry has been long-running since restaurants shuttered for in-person dining in March 2020—and only just returned to pre-pandemic staffing levels at the end of 2023.
Increased restaurant spending due to price increases is even more evident in the West than in other parts of the country. Nevada, Utah, Idaho, Arizona, and California saw the largest increases in food spending at restaurants from 2019 to 2023.
If there's any promising news for those lamenting the skyrocketing prices at dining establishments and fast food restaurants, it's that price increases have slowed over the last year. In June, restaurant prices grew around 4%, half the rate they were growing at their recent peak in March of 2023 when they increased 8.8% year over year, according to a National Restaurant Association analysis of Bureau of Labor Statistics data.
Story editing by Alizah Salario. Additional editing by Kelly Glass. Copy editing by Tim Bruns.
