Food Prices and American Waistlines
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

Is there a silver lining behind the increase in American food prices? It has been documented that cheap food encourages more eating. Might not the corollary prove true, that higher food costs will dampen our nation’s appetite and slow the growth of America’s girth?
Food prices rose nearly 5% in 2007, and at an annualized rate of more than 6% during the past three months. That’s a big step up from the average increases of 2.5% a year posted for the past 15 years. While for people at the lowest end of the economic ladder higher food prices may lead to the real tragedy of rising hunger, for most Americans it will more likely alter food consumption habits. In the best outcome, Americans might cut back on their calorie intake.
Obesity is a growing concern in America, now adding more than an estimated $100 billion a year in health care costs, according to the Endocrine Society. More alarming for the future is the childhood obesity epidemic, which, by some accounts, claims 12.5 million children, or more than 17% of Americans under age 18.
Studies show that up to 80% of overweight teenagers will carry their excess pounds into adulthood, guaranteeing increased incidents of diabetes, heart disease, stroke, and cancer. This is not a nanny-knows-best lifestyle issue. This is a rising threat to all Americans who, in the end, will pay for the care of people responsible even now for a ballooning portion of our country’s medical expenditures.
Maybe higher-price Twinkies will prove a blessing in disguise.
“Having less available income across the entire country should reduce the obesity problem,” an associate professor of finance at the University of Baltimore, Kenneth Stanton, who has written extensively on obesity, says. However, he says that even more damaging than inexpensive food are the relative prices of various food items.
“The subsidies for corn and soybeans given out by the government coincided with the uptick in obesity, because it reduced the cost of producing high fructose corn syrup,” Mr. Stanton says. “That meant you could take stuff that you shouldn’t put in your mouth and make it appealing. The worst possible things are the least expensive.”
Mr. Stanton is on the mark. Foods that are most nutritious for their calories, such as fresh fruits and vegetables, are the most costly and the most volatile in terms of price. Figures from the Bureau of Labor statistics show that the price swings in fresh fruit and vegetables have been 5% to 6% over the past 20 years, while fluctuations in processed fruits and vegetables averaged only around 3%. The most volatile item is eggs, with average annual price swings of 8%. True to form, it is the prices of fresh produce and dairy items, and grains such as corn and wheat, that have climbed most sharply during the past year.
This trend will likely tilt consumers toward processed and fast foods, where price rises have lagged. Because so much of the cost of such items, long seen as major culprits in Americans’ weight gain, comes from packaging, marketing, and transportation, the direct impact of price swings is muted. For example, the USDA says that only 19 cents of every dollar spent on processed items comes from food ingredients, down from twice that much 30 years ago.
The National Corn Growers Association, defending charges that ethanol production has been the prime driver of food cost inflation, points out that a standard box of corn flakes contains only about 10 ounces of corn, or 1/90th of a bushel. Even at a record price of $8 a bushel, the actual cost of corn in a box of cornflakes would be only about 10 cents. (And that’s supposed to be good news.)
Still, rising fuel prices are boosting distribution costs, causing an increase in fast food and processed food prices as well. An economist with the USDA, Ephraim Leibtag, says that although “food prices are going up across the board,” he is skeptical that the rise to date will force consumers to cut back. However, he says he thinks the more likely impact will come from restaurants slimming down portion sizes. “Over the past 15 to 20 years, raw materials prices have gotten cheaper or stayed the same, causing the whole SuperSize movement. The biggest issue is not quality but quantity of food. We all eat too much, period.”
For many reasons Americans spend a lower portion of their budget on food — only 7.2% in 2006 — than people in most countries. America is blessed with an extremely productive agriculture industry and a highly efficient processed food manufacturing and distribution sector, and Americans enjoy a higher level of income. Nonetheless, Americans feeling the economic pinch will look for areas in which to cut back, and that may include food. Unfortunately, they will likely target first those healthy (and costly) items for which prices have risen most quickly.
A Web logger recently compared the cost of obtaining 200 calories from various food items. The results are disheartening for those hoping that Americans can be driven to better eating habits by rising prices or declining income.
For instance, a glazed doughnut can supply 200 calories for 23 cents, while eggs cost 50 cents for the same 200 calories. While Coca-Cola costs 46 cents for 200 calories, smoked turkey and celery are priced at more than $3 for the same amount of energy.
So, as Americans watch their incomes fall, will they really cut back on potato chips (33 cents for 200 calories) or peanut butter (17 cents), or will they eliminate baby carrots, which cost $2.50 for the same 200 calories? In other words, as they tighten their belts, will they really end up tightening their belts? Doubtful.
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