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Consumer Spending on Food

By Jim Chen at al.

The Wall Street Journal has recently chronicled the impact of the economic crisis on food and agriculture. Financial woes are impacting both consumption and production patterns.

With respect to food purchases, in an article published yesterday, Consumers Cut Food Spending Sharply, consumer efforts to trim food costs were described.

In 2008's fourth quarter, consumer spending on food fell at an inflation-adjusted 3.7% from the third quarter, according to data from the Commerce Department's Bureau of Economic Analysis. That is the steepest decline in the 62 years the government has compiled the figure.

Hit particularly hard are "sit-down" restaurants, although the decision to cut back on these expenditures has very divergent outcomes. On one hand, some consumers have turned to cheap fast food. McDonald's reported that same-store sales rose 5.4% in January in the U.S.

On the other hand, there are those who are joining the ranks of the foodies.

Other consumers are opting for home cooking. In Bellevue, Neb., stock broker Kevin Vaughan and his wife cook chicken to make broth from scratch instead of buying it in cans, and use all of the resulting meat for multiple dishes. "You'll have three or four meals off a $10 to $12 investment," he said. And there's another bonus from reduced food purchases, he added: less trash to take out.

Full post as published by Agricultural Law on February 14, 2009 (boomark / email).