Food inflation has emerged as a significant “kitchen table” issue in the current presidential election, with each side attributing blame to the other while claiming to have a solution. To gain perspective, I decided to examine food inflation trends over the past several decades, specifically from 1973 to 2024, which encompasses my adult years—beginning when I moved out at 18 and started purchasing my own groceries.
Why Focus on Food Inflation?
Food inflation is distinct from other types of inflation, as it is influenced by a range of factors beyond general economic conditions. Variables such as weather, natural disasters, wars, and labor disputes can all impact food prices. Unlike fuel costs, which are not directly affected by rainfall in specific regions, food prices are highly sensitive to environmental conditions. For example, the source of tomatoes in Atlanta may vary throughout the year—from the Southeast in summer, California in spring and fall, to Mexico or Chile in winter—making food prices susceptible to weather across multiple regions. This variability applies to other staples like lettuce, potatoes, and meat as well.
Food Inflation by Presidential Administration (1973-2024)
Over the past 52 years, food inflation has averaged 4.1% per year. Here is a breakdown by presidential administration:
- Nixon (1973-1974): 6.3% (Nixon resigned in August 1974)
- Ford (1974-1976): 13.7%
- Carter (1977-1980): 8.7%
- Reagan (1981-1988): 4.0%
- Bush (H.W.) (1989-1992): 4.1%
- Clinton (1993-2000): 2.5%
- Bush (W.) (2001-2008): 3.0%
- Obama (2009-2016): 1.8%
- Trump (2017-2020): 1.9%
- Biden (2021-2024): 5.5% (through July 2024)
Over this period, six Republican presidents held office for a total of 28 years, while four Democratic presidents served for 24 years.
Food Inflation by Political Party (1973-2024)
When broken down by political party, Republican administrations averaged a 4.2% food inflation rate, while Democratic administrations averaged 3.8%. This data suggests only a marginal difference in food inflation rates based on the party in power, indicating that other factors play a more significant role.
Source: https://www.usinflationcalculator.com/inflation/food-inflation-in-the-united-states/
The Underlying Causes of Food Inflation
If the political party in power has little impact on food inflation, what are the primary causes? Beyond the aforementioned factors like weather and labor disputes, government policies contribute significantly to food inflation.
Tariffs
Tariffs, often imposed to protect domestic farmers, are a key factor. These tariffs are essentially taxes on imported foods, designed to prevent foreign products from undercutting prices for American farmers. However, this protection comes at a cost to consumers, as tariffs keep food prices artificially high.
Foods subject to tariffs include cantaloupes, apricots, spinach, and more. Additionally, tariff-rate quotas further limit imports of items like sugar, dairy products, peanuts, and chocolate, contributing to higher food prices for consumers.
Biofuel Mandates
The Renewable Fuel Standard (RFS), enacted in 2005, requires that all transportation fuel be blended with up to 10% ethanol, a figure that some advocate increasing to 15%. Ethanol production consumes a significant amount of corn, reducing the supply available for food, thus driving up corn prices. Corn is also a versatile ingredient used in livestock feed, cooking oil, sweeteners, snacks, beverages, and household products, meaning the impact of the RFS is widespread. It is estimated that the RFS mandate has increased food prices by up to 2%.
Conclusion
While it is easy to blame the President for food inflation, the reality is more complex. Government policies, particularly tariffs and biofuel mandates, have played a significant role in driving up food prices. Thus, while the President may not be directly at fault, the broader government bears some responsibility for contributing to food inflation.