Food prices rose just 1.8% in 2012, the second-lowest annual rate in the last 20 years, according to recently released consumer price index (CPI) data. The new data demonstrates the absurdity of the alarmist rhetoric coming from Big Food about the impact of ethanol and the Renewable Fuel Standard (RFS) on consumer food prices. Indeed, annual food inflation has averaged 2.8% since the RFS was first enacted in 2005, compared to a 25-year average (1988-2012) of 2.92%.
Other interesting facts from the December CPI:
- Food inflation in 2012 was barely higher than general inflation, which totaled 1.7% for the year.
- Prices for “food at home” (i.e., groceries) in 2012 were just 1.3% higher than in 2011.
- Prices for “food away from home” (i.e., restaurants) were 2.5% higher, indicating that restaurants marked food prices up at nearly twice the rate as grocers.
- Prices for cereals and bakery products were just 0.8% higher.
- Meats, poultry, fish and egg prices were just 1.5% higher in 2012, less than the overall food inflation rate and the general inflation rate.
- Pork prices were actually lower in 2012 than in 2011.
- Spending on meats, poultry, fish and eggs comprised about 2% of overall expenses for the average American family.
- Prices for dairy and related products increased just 0.5% last year.
Use these facts the next time Big Food and Big Oil sound their bogus alarm bells about “skyrocketing” food prices and the effects of the RFS on food prices.