Americans Spend $1.1 Trillion on Food But Hidden Costs Are 3 Times As Much

Those hidden costs take the form of health and environmental expenses.

corn crop
An Illinois farmer unloads corn in July 2021.

Getty Images/Scott Olson

Every year Americans spend around $1.1 trillion collectively on food. But when you factor in the impact that food production, distribution, and consumption have on U.S. society, the cost is tripled. So in fact, Americans are paying closer to $3.2 trillion annually for their food system.

This extraordinarily high number has been calculated by the Rockefeller Foundation in a new report that was released in July 2021 and titled "True Cost of Food: Measuring What Matters to Transform the US Food System." The Rockefeller Foundation—a private charity that funds agricultural and medical research—partnered with various experts and think tanks, while gathering government statistics, to create this report.

Americans have some of the cheapest food in the world when you look at its price tag alone. On average, the report says, "consumers spend less than 5% of their disposable income on food," compared to other developed countries like Canada and Austria that, respectively, spend 9.1% and 9.9% of their income on food. For reference, households in nations such as Nigeria, Guatemala, and Pakistan spend between 40-56%.

The $1.1 trillion price tag is something of an illusion, as it includes the costs of producing, processing, and retailing the food we buy, but nothing else. From the report's introduction:

"It does not include the cost of healthcare for the millions who fall ill with diet-related diseases. Nor does [it] include the present and future costs of the food system’s contributions to water and air pollution, reduced biodiversity, or greenhouse gas emissions, which cause climate change. Take those costs into account and it becomes clear the true cost of the US food system is at least three times as big."

The price tag neglects to account for the struggles faced by food industry workers, who represent 10% of the American labor force and often work for less than a living wage, and for the disproportionate burden carried by people of color and other marginalized communities that are more likely to suffer from diet-related diseases and have reduced access to clean water.

The researchers believe that if the true cost of the U.S. food system is accurately measured, then effective adjustments can be made, thus improving health and wellbeing in the process. Of the five areas identified to be most affected by food production and consumption—biodiversity, livelihoods, economy, health, environment—the latter two are believed to contribute the largest portion of the additional cost.

From the report: "If diet-related disease prevalence rates were reduced to be comparable to countries such as Canada, health care costs could be reduced by close to $250 billion per year. Similarly, if the US can reduce agriculture-specific emissions to comply with the 1.5C pathway, then close to $100 billion could be reduced in additional environmental costs. This is the potential of true cost accounting."

Increasing food prices for consumers is not the solution, the report authors state clearly. There are various options instead that can reduce the true cost. These include redesigning public nutrition programs, promoting dietary shifts, adopting more resource-efficient business practices, innovating technology to improve the nutritional value of products, and implementing policy changes.

Americans would do well to start thinking about these hidden costs—and how to resolve the issues at their roots—in order to create a better life and world for themselves, as well as for subsequent generations. As the Rockefeller Foundation stated in a video posted on Twitter, "Don't think we're getting a good deal here. We're actually getting squeezed." The balance always has to be paid, but it's better for that cost to come from our pockets, rather than through rising healthcare expenses, climate change fallout, and underpaid or undervalued food workers.

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