When droughts or crop failures cause food prices to spike, many Americans barely notice. The average American, after all, spends just 6.6 percent of his or her household budget on food consumed at home. (If you include eating out, that rises to around 11 percent.)
In Pakistan, by contrast, the average person spends 47.7 percent of his or her household budget on food consumed at home. In that situation, those price spikes become a lot more noticeable.
The US Department of Agriculture’s Economic Research Service keeps tabs on household expenditures for food, alcohol, and tobacco around the world.
Americans, it turns out, spend a smaller share of their income on food than anyone else — less even than Canadians or Europeans or Australians:
Note that the map above is based on data for food consumed at home — the USDA doesn’t offer international comparisons for eating out, unfortunately. Still, even if you do include food consumed at restaurants, Americans devote just 11 percent of their household spending to food, a smaller share than nearly every other country spends on food at home alone.*
Below is a chart showing numbers for a handful of select countries. Note that this doesn’t include spending on subsidies and the like — it’s just a measure of the fraction of household expenditures devoted to food consumed at home:
There are a few notable points here:
1) Richer countries spend a smaller fraction of their income on food. This makes intuitive sense. There’s an upper limit on how much food a person can physically eat. So as countries get richer, they start spending more of their money on other things — like health care, or entertainment, or alcohol. South Koreans spent one-third of their budget on food in 1975; today that’s down to just 12 percent.
That said, this relationship doesn’t always hold. It depends, at least in part, on what kind of food people favor, patterns of eating out, and the specific food prices and subsidy schemes in their country. Note that India spends a smaller fraction of its budget on food consumed at home than Russia, which is much richer. Likewise, South Korea spends a smaller share of its budget on food than wealthier Japan does.
2) Americans spend less than Europeans on food. The fact that Americans spend a smaller portion of their budgets on food than Europeans do is partly a consequence of the fact that Americans are richer. But Americans spend less on an absolute level, too.
The average American spends $2,273 per year on food consumed at home, the USDA notes. The average German spends $2,481 per year. The average French person spends $3,037 per year. The average Norwegian spends a whopping $4,485 per year on food.
The USDA doesn’t explain the variation. Some of it likely has to do with different tax systems in Europe (here’s a comparison of food prices in Europe), as well as differences in eating out. But there are also dozens of forces making food in the United States so cheap — from farm subsidies to advancements in industrial agriculture that have pushed down the price of food. (Over the years, the price of meat, poultry, sweets, fats, and oils in the United States have fallen, although the price of fresh produce has risen.)
There are fierce debates about the downsides of industrial agriculture — as well as the desirability of subsidizing agriculture. But one thing this system has done fairly well is keep the sticker price of food at the grocery store down.
3) High spending on food and malnutrition seem to go hand in hand. This is another perhaps obvious point, but worth highlighting. Poorer countries that have to spend a much larger share of their budget on food also end up with much higher malnutrition rates.
One conclusion might be that most of us can afford to invest in a better quality of life for all by buying our food from local farmers.