Americans spend less of their income on food than almost ever: why groceries still feel expensive

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• How a single figure rewrites our daily budget story
• What Engel’s Law explains about household choices
  • Why it matters beyond groceries
• The farming revolution that shrank food bills
• Price spikes, pandemic shocks, and who felt the squeeze
  • What recent data tell us about behavior
• Hidden costs behind “cheap” food
• Inequality, safety nets, and policy levers
• What the falling food share unlocks for society

It feels like every corner of the US economy is odd right now — hiring is uneven, markets swing, and AI reshapes jobs. Yet one statistic stands out for its quiet strangeness: 10.4 percent. That’s the slice of disposable income Americans devoted to food in 2024, according to the USDA’s Economic Research Service. Groceries, takeout, midnight burritos — together they now consume about a dime of every dollar households earn.

How a single figure rewrites our daily budget story

At first glance, 10.4 percent clashes with the frustration at the checkout line. High grocery bills and viral stories about delivery app spending make food feel expensive. But placed in long-term perspective, this share is historically tiny.

• In the first major US household survey, in 1901, families spent roughly 42.5 percent of their budgets on food.
• By 1947 grocery spending alone was around 23 percent.
• Through the 1960s, total food spending hovered near 15 percent of income.

Those older percentages would translate into thousands of extra dollars a month at today’s incomes. The drop to roughly 10 percent is a profound shift in how Americans allocate money.

What Engel’s Law explains about household choices

Economists call this pattern a classic: the richer people become, the smaller the share of income spent on food. It traces back to the 19th century.

Ernst Engel first noted the trend while studying Belgian households. He found that poor families devoted most of their cash to food, while wealthier families spent proportionally less. That observation, now known as Engel’s Law, has stood up across time and places.

Why it matters beyond groceries

Food share is more than a price measure. It functions as a barometer of freedom. When households stop needing most of their income just to eat, they can spend more on education, health care, savings, and leisure.

The farming revolution that shrank food bills

The fall in the food budget share didn’t happen by accident. It followed a massive transformation in agricultural productivity.

Consider these changes:

• Mechanization and tractors replaced huge labor forces.
• Hybrid seeds, synthetic fertilizers, and modern genetics dramatically increased yields.
• Supply chains, refrigeration, and global trade widened access and variety.

The result is startling: where one farmer fed about 19 people in 1940, today that same farmer supports nearly 170 people. Corn yields, an instructive example, rose from roughly 26 bushels per acre in the late 1800s to over 180 today.

The USDA has shown that real retail food prices in recent decades declined slightly compared with 1980, even as variety and quality rose. Supermarket shelves now offer global choices year-round at prices that would have baffled past generations.

Price spikes, pandemic shocks, and who felt the squeeze

That long-term decline doesn’t erase short-term pain. Between 2020 and 2024, food prices rose nearly 24 percent. Specific items surged: egg prices jumped after avian flu outbreaks, and beef saw notable increases.

But averages conceal differences across households. The lowest-earning 20 percent of families spend roughly 32.6 percent of after-tax income on food. The top quintile spends about 8.1 percent. Crises hit the poorest hardest.

What recent data tell us about behavior

During the pandemic and its aftermath, the pattern of spending shifted. Consumers overall spent more on groceries and less on dining out than before. Younger households, especially those under 25, increased home cooking — a reversal of some pre-pandemic trends.

So, the social-media narrative that Americans are frittering paychecks away on delivery apps misses the bigger picture. The aggregate trend shows restraint on eating out and greater pressure from grocery inflation.

Hidden costs behind “cheap” food

Cheap food at the register carries a set of consequences that don’t appear on receipts.

• Health impacts: Industrial food systems helped make ultra-processed foods cheap and ubiquitous. That correlates with rising rates of obesity, Type 2 diabetes, and heart disease.
• Environmental damage: Large-scale monoculture, fertilizer runoff, and greenhouse emissions shift costs from consumers to ecosystems and public budgets.
• Animal welfare: The industrial model imposes heavy tolls on billions of farmed animals, an ethical cost often externalized.

These externalities show that a low price tag can mask larger societal bills.

Inequality, safety nets, and policy levers

Because the average masks wide gaps, public programs play a big role. SNAP and school lunch programs have softened the blow for millions. In 2023 SNAP reached about 42 million people per month.

Yet persistent disparities remain. The same Engel’s Law that explained Belgian budgets in the 1850s still describes modern American inequality: lower-income households allocate many times more of their income to food than wealthier ones.

• Targeted nutrition support can reduce hardship.
• Stronger food system regulation could limit environmental harm.
• Health policy and education can address diet-related illnesses.

What the falling food share unlocks for society

Low food spending as a share of income is not merely an accounting curiosity. It creates room in family budgets. Freed resources can finance schooling, medical care, small businesses, and savings.

That expansion of choices is a quiet form of progress. It opens opportunities to address the very problems the food system creates — if policymakers and the public choose to act.