Food Price Fun compares the theory of food prices to practices of buying food.  On the one hand the Bureau of Labor and Statistics (BLS) Consumer Price Index (CPI) food prices provide the benchmark for the macroeconomy of food.  But the food microeconomy looks different on the ground with individual household purchases.  Food Price Fun unpacks these macroeconomic and microeconomic perspectives through the illustrative, non-causal, lens of a single household in 2024.

The first Food Price Fun post, 3/20/25, looked at 2024 grocery retail purchases in South Central Illinois, dairy products.  All of the products purchased in 2024 were mostly under $0.15/ounce (oz), except for cheese.  Generic, pre-sliced, cheese was often $0.30/oz in grocery store prices.  Eggs were the only product examined that increased throughout the year.

Today’s post looks at dry carbohydrates: cereal, chips, and rice cakes.  Bread in traditional terms does not happen in our household for multiple reasons.  Rice cakes are a bread substitute.  In today’s chart, cereal and chips fall below $0.30/oz. Rice cakes weigh in right at $0.50/oz.

Branded vs. Generic.  The main story in this chart is that branded products are generally about $0.20/oz more than generic and store brand products, sometimes doubling the price of the product.  Crispy rice cereal is a mainstay for breakfast.  This is often purchased in oversize 61-ounce bags (regular boxes of cereal are about 12 ounces).  Crispy rice cereal is priced below $0.16/oz as a target.

In August, a branded product in a 12-ounce box was purchased at more than a $0.20/oz premium in price.

This same phenomenon was observed for all product categories.  These branded product anomalies are identified in the chart in red boxes.  It is interesting that most of those brand-purchasing excursions occurred in the first half of 2024.  As 2024 progressed, there were fewer diversions away from branded products.  This buying strategy alone caused average food prices on an $/oz basis to decline over the year.  In this case, declining prices do not reflect a declining CPI of food.

For rice cakes, cheaper generic and store brands are available over what was purchased.  However, the discounted rice cake brands do not carry chocolate-flavored rice cakes in our buying area.  Our household pays a premium price for chocolate rice cakes.

Local vs. Neighboring Community Food.  The one higher priced, rice cake purchase in June, happened at the local grocery store.  Most of this household food purchases are made 20 miles outside of Greenville, Illinois.  Greenville has grocery food available but the town is not large enough for competitive forces to drive down prices.  Some purchases are happily made in Greenville each week to support these stores.  Without these local grocers, local food for the entire community would be more expensive.  But bringing food to Greenville is not cheap, so prices in this remote location, tend to be slightly elevated.

Inference to Food Price Inflation.  The CPI food price is an economy-wide, aggregate of food prices at home (grocery) and away from home (restaurant).  This post only looks at food at home, which in 2024 was below the inflation rate for all prices.  The version of the CPI most easily accessed represents the prices in the largest urban areas.  Food prices are different in rural areas.  Sometimes they are cheaper, sometimes more expensive.  The economy of generic food brands also differs from that of branded food products.  There is more than one reason local food prices will not behave exactly like the CPI food price levels.

The CPI food price indices are excellent guides for planning purposes, but they are not without multiple exceptions.  It is important to utilize macro-level knowledge with micro-level household strategies.