Many American consumers have been felt the effect of rising food prices on their grocery bills. Between 2006 and 2016, the price of food has increased by 27.8%, outpacing the 21.9% inflation rate. The prices of some goods and popular consumer items have also surged to a much greater degree.
To determine which items are driving up grocery bills the most, 24/7 Wall St. analyzed changes in the Consumer Price Index from 2006 to 2016 for over 300 goods with data from the Bureau of Labor Statistics. Nearly doubling in price over the last 10 years, cigarettes had the largest increase in price of any grocery item.
Several factors are behind the general rise in the price of food over the last few decades. One is greater demand. As the world population becomes wealthier over time, demand for food and more expensive goods rises. Specifically, as people have demanded more meat, the price of cattle, poultry, and other animal products has increased.
Click here to see the 20 groceries driving up your bill the most.
In the United States, there were large upswings in the prices of a few cow products. The average retail price of beef increased from $4.09 a pound to a record-high $6.29 per pound. As a result of the price increase, Americans consumed roughly 3 billion pounds less of beef in 2015 than in 2005. The price increase was largely due to a supply shortage of beef. Years of drought in the top cattle-producing regions of the country led to reduced cattle inventories, as well as rising energy and animal feed prices.
Animal feed is one of a number of products made from wheat and corn that is growing more expensive. Corn and wheat are particularly susceptible to supply shocks and price volatility, and the country is currently dedicating a larger share of its corn supply for uses outside of agriculture. The U.S. government provides subsidies to farmers who grow corn for use in biofuels, prompting many farmers to switch from growing corn for consumption to growing it for ethanol production. While an estimated 6% of U.S. corn crop was used for ethanol in 2000, that share has since risen to 40% today. Additionally, the World Trade Organization limits the supply of corn and wheat that the U.S. can store in reserve, weakening the country’s buffer against shortages. A number of foods with the fastest rising prices contain either corn or wheat as a primary ingredient.
Price increases of such basic ingredients as flour, sugar, corn, and oil — used in a wide array of foods — can impact a large share of grocery items. The price of flour, for example, rose by 32% between 2006 and 2016. A number of items that require flour as a basic ingredient, such as cookies, cupcakes, pasta, and bread, also rose in price substantially.
For most basic goods, price fluctuations can have a major impact on consumer behavior. A major hike in the federal cigarette tax in 2009 — from 39 cents per pack to just over one dollar per pack — likely drove down tobacco consumption considerably. Over the last 10 years, the price of tobacco and other smoking products rose by 90.4%, more than four times the overall increase in price for all goods. The U.S. adult smoking rate fell from 20.9% in 2004 to 16.8% in 2014.
To determine which items are driving up grocery bills the most, 24/7 Wall St. analyzed changes in the Consumer Price Index from 2006 to 2016 for over 300 foods and frequently purchased consumer items with data from the Bureau of Labor Statistics. Definitions of food items also came from the BLS. To avoid repetition, we excluded certain items from the list when a similar product had a larger increase. For example, two items classified on the CPI — uncooked ground beef and uncooked beef steaks — each had substantial price increases. Only uncooked ground beef, which had the larger 10-year increase, remained on the list.
These are the 20 foods driving up your grocery bill the most.
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.