Wednesday, January 14, 2009

Fruit and vegetable consumption - Will price make a difference?

Here is a USDA ERS report called "Fruit and vegetable consumption by low income Americans: Would a price reduction make a difference?"

At first blush, I have to say the title of the report appears incredibly condescending. Think about it; Do fruit and vegetable prices matter to a low income American, or is he so stupid that higher prices might move the consumption needle?

Of course, that kind of meaning is not the authors intent. Here is an excerpt from the executive summary:

American diets continued to fall short of the recommended consumption levels of fruits and vegetables. On average, Americans consumed 1.03 cups of fruits and 1.58 cups of vegetables per day in 2004, compared with the recommended 1.80 cups of fruits and 2.60 cups of vegetables Individuals eligible for benefi ts through the Supplemental Nutrition Assistance Program owincome consumers) ate even smaller amounts of fruits and vegetables—0.96 cup of fruits and
1.43 cups of vegetables. Using a range of price elasticities and estimates of food consumption by low-income Americans, USDA’s Economic Research Service calculated that a 10-percent price discount at the retail level would encourage low-income households to increase their onsumption of fruits by 2.1 to 5.2 percent (from 0.96 cup to 0.98-1.01 cups) and vegetables by 2.1 to 4.9 percent (from 1.43 cups to 1.46-1.50 cups). In 2004, low-income households spent $3.91 billion on fruits and $3.71 billion on vegetables at retail outlets. Discounting the prices of fruits and vegetables by 10 percent for low-income households would cost the Government, on average, about $308 million per year for fruits (7.9 percent of recent expenditures on fruits by low-income Americans) and $274 million for vegetables (7.4 percent of recent expenditures on vegetables by low-income Americans).

1 comment:

Anonymous said...

Thanks for posting this report. Before I read the excerpt, I'd formulated a counter-point -
Fruit and Vegetable Production; Will Price make a difference?
If retailers do not put equal effort into driving down their margin as they do driving down the margin of their suppliers (growers) we will find ourselves with much less supply as a whole in as few as 9 months. And then there will be no opportunity to pass along the savings, and encourage consumption.