Consumers Put Brakes On Food Spending Last Year

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The behavior of the U.S. consumer changed significantly in the last half of 2008 as prices for food rose at the highest level in almost two decades. Americans spent an estimated $1.38 trillion on food last year according to the Bureau of Economic Analysis' most recent quarterly report - that's 2.47% less than food spending had been trending in the third quarter of 2008 and the largest quarterly adjustment since the government began tracking such data in 1947.

Americans spent an estimated $1.38 trillion on food last year according to the Bureau of Economic Analysis' most recent quarterly report - that's 2.47% less than food spending had been trending in the third quarter of 2008 and the largest quarterly adjustment since the government began tracking such data in 1947 despite soaring food price inflation. "It is safe to say the U.S. shopper reacted to the downturn in the economy more quickly than at any time in recent history and more vociferously than at anytime since immediately World War II when the government began tracking this data," commented Brian Todd, President of The Food Institute. See graphic at http://www.foodinstitute.com/foodexpindex.pdf.

The behavior of the U.S. consumer changed significantly in the last half of 2008 as prices for food rose at the highest level in almost two decades. While no one can predict the future, The Food Institute will keep its members and the industry overall abreast of economic developments as it has since 1928. The Food Institute will hold a webinar on "What's Ahead For Food Prices," on Feb 24 at 1:00pm EST. (Details at http://www.foodinstitute.com/foodprices.cfm)

Following two years of accelerated food price inflation, what is the outlook for retail food prices in 2009? As the US and global economies have fallen into a recession and commodity and energy prices have fallen 30% to 60% over the past few months, the food industry faces lower costs, but greater uncertainty. Both the depth and breadth of the current recession will have an impact on the food sector and ultimately affect the prices charged by retailers and paid by consumers. This webinar will focus on the factors that led to the run up in inflation in 2007 and 2008, how these factors have changed over the past few months, and what that means for 2009 and beyond.

The event will feature USDA economist Ephraim Leibtag, and Kenneth Zaslow, CFA, Director Food & Agribusiness Research, BMO Capital Markets, moderated by Michelle Stoken, V.P. Pricing, Monarch Foods. For more go to the Food Institute website at http://www.foodinstitute.com/foodprices.cfm.

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