Food Prices In Context

There is still a lot of talk about high food prices.

I hear about it every time that Mrs. BeeLine goes to the grocery store.

As a meat lover, recent prices are especially hard for me to digest

Ground beef over $6/lb.

Sirloin steak is over $14/lb.

From everything I read beef prices will be worse in 2026.

The beef cattle herd is the smallest it has been in 70+ years.

The inflation spiral during the Biden years drove up feed and other prices which caused cattle ranchers to cull their herds, 

Market forces will probably result in more supply eventually but it will take a couple of years to have meaningful effects. A new calf takes time to mature and it will likely be 2027 before we see any relief in beef prices due to the forces of supply and demand.

We can see what increased supply has done to eggs prices over the last year.

The Biden administration ordered the killing of millions of chickens over concerns about bird flu.

Over 50 million hens were "depopulated" in late 2024 and early 2025.

Lower egg production caused egg prices to soar to over $6/dozen in March, 2025.

This was the primary cause of soaring egg prices earlier this year.

However, since March, the average price of eggs has fallen from $6.23/dz to $2.86---a 54% decrease.

Prices have fallens as a result of an increase in egg production.

Almost 1 billion additional eggs were produced last month compared to February, 2025.

Source: https://esmis.nal.usda.gov/sites/default/release-files/795695/ckeg1225.pdf

Egg prices should get even better in the next few months as wholesale prices dropped to .61/dozen on December 29, 2025. That is as low as it has been in the last five years.

Source: https://tradingeconomics.com/commodity/eggs-us

Just as there has been relief in egg prices, I would expect moderating grocery store prices in 2026 in that gasoline prices are trending lower and transportation costs influence food prices at every stage of the supply chain. 

I have cited the fact before in these pages that there is an estimated 400 gallons of fuel used each year in feeding each American.

Lower fuel prices will work to moderate food prices just as higher fuel costs caused prices to spike.

We might be seeing that effect with bananas already. Bananas have pretty consistently been priced at between $.55-$.60 per pound over the last couple of years at my local Kroger. On New Year's Eve they were $.49.

I would not expect overall prices to come down as was the case with eggs but the cost pressures of producers, distributors and retailers should not be as acute as they have been.

Despite all the news about high grocery store prices, and our own price shock at times, the fact is that food prices relative to incomes are still near the lowest it has ever been.

Mrs. BeeLine does not believe it but the numbers suggest otherwise.

This is the Federal Reserve chart that compares food costs to median household income over the last 40 years.

The total amount spent for food out of the share of disposable personal income in the United States shows the same trend according to the U.S. Department of Agriculture Economic Research Service.

In 1950, food at home consumed 15% of the typical family's budget. Today it is 5%.

Total food expenditures as a share of personal disposable income was 20% in 1950. It was 10.4% in 2024 down from 11.3% in 2023.

What has really changed over the years?

More of a family's household income today is spent eating out than food at home.

However, as a % of the family's disposable income eating out has only modestly increased over the last 60 years.

Source: https://www.ers.usda.gov/data-products/food-expenditure-series/interactive-charts-food-expenditures

There is a lot of talk about how expensive it has become to even eat at McDonald's.

However, compared to the rest of the world, Americans still have real advantages.

This fact is revealed by looking at The Big Mac Index which is a price index developed by The Economist magazine in 1986 that compares the price of a McDonald’s Big Mac cheeseburger in various countries.

This index provides a quick and easy way to do country-to-country comparison of purchasing power parity (PPP) and currency values all over the world. Since the product is standardized worldwide it makes simple to compare local costs by country.

That tool can also be used to determine how many Big Mac's can be purchased annually with the average annual incomes in various countries around the world.

On this measure, incomes in the United States make the Big Mac more affordable to the populace than any other country in the world. 

The average American can buy 13,601 Big Macs annually. Switzerland is second with 11,826.

The average Mexican's income is barely sufficient to buy 2,000 Big Macs in a year.

Source: https://econlife.com/2025/09/comparing-wages/

It is easy to understand why Mrs. BeeLine and most everyone else wants to complain about food prices today.

I shudder myself passing the meat counter or walking into Chick-fil-A.

However, the fact is that most everyone in history, and anyone living anywhere else in the world today, would gladly take the food prices (and incomes) that Americans are complaining about.

It is just one more example of why "context is everything when assessing anything".