Americans opened their wallets to spend a record amount on food last year, even when inflation is considered, partly because they like the convenience of take-out and restaurant food, said two USDA economists. Outlays on food away from home grew by an inflation-adjusted 11 percent last year at the same time inflation was driving up prices.
“These trends suggest that consumers were willing to increase their share of FAFH (food away from home) spending in their budgets, even with rising prices,” wrote Eliana Zeballos and Wilson Sinclair of the Economic Research Service. “Moreover, while some households may have adjusted their FAFH consumption in response to rising prices, wage growth or improved economic conditions may have resulted in more disposable income for others. This increased financial flexibility could have allowed some households to maintain or even increase their FAFH spending despite higher prices.”
In an article in USDA’s online magazine Amber Waves, Zeballos and Sinclair said consumers spent 53.9 cents of their food dollars on FAFH during 2022, the largest share since USDA began tracking expenditures. FAFH generally costs more than groceries purchased for home consumption. Since 2004, with the exception of the pandemic year of 2020, Americans have spent more on food away from home annually than for food at home.
Spending on FAFH rebounded in 2021 and surpassed 2019 levels by mid-year. “Several factors contributed to this resurgence, including the re-opening of restaurants, the availability of takeout options and the return to work for many people,” said the ERS economists.
Adjusted for inflation, annual U.S. spending on food increased 70 percent from 1997 to 2022, they said. The U.S. population grew 24 percent during the 25-year period.
EDITOR’S TAKE:
In some ways this article seems counter-intuitive to what we have been hearing on the news – consumers can’t keep up with inflation and are cutting back on discretionary and even some necessities. So, what gives here? People are leading busy lives, working two or three jobs, raising families and sometimes they just need a break. In addition, many families did in fact cut back on vacations, large purchases and decided eating out was their entertainment, if you will. For whatever reason, people are spending a larger portion of their food dollar on eating out – food away from home. Be that as it may, there is one group that is not cutting back on things like truck purchases – farmers/ranchers! Farmers/ranchers should be at the top of every CAD member’s potential customer list. They purchase a lot of trucks every year and they have the financial means to make it happen. That can also mean more parts and service revenue down the line. So, get your inventory on AgTruckTrader.com.
