Grocery Cost Estimator

The estimate rests on the USDA Food Plans, four market baskets priced monthly by the Center for Nutrition Policy and Promotion that represent nutritionally adequate diets at four cost levels: Thrifty, Low-Cost, Moderate-Cost and Liberal. Per-person monthly costs in recent releases have run roughly 250 to 300 dollars on the Thrifty plan and 500 dollars or more on the Liberal plan for an adult. USDA applies explicit household size adjustments to those per-person costs because larger households buy in bulk and waste less: add about 20 percent for a one-person household, 10 percent for two, no adjustment for three or four, subtract 5 percent for five or six and 10 percent for seven or more. Layered on top are three local factors. Regional price levels differ substantially, with Northeast and West Coast metro grocery prices typically running about 8 to 12 percent above the national average and Southern and Midwestern markets several percent below, while Hawaii and Alaska run 40 percent or more above. Organic produce and dairy carry a premium commonly in the 20 to 60 percent range over conventional. Meals eaten away from home reduce grocery volume but usually raise total food spending, since a restaurant meal costs roughly three times the ingredient cost of the same meal at home. The main caveat is that the USDA baskets assume all meals are prepared at home from largely unprocessed foods, so households relying on convenience items will exceed the plan cost at the same nutritional level.

USDA food plans began in the Great Depression. Hazel Stiebeling, a nutritionist at the Bureau of Home Economics, published in 1933 a set of four food plans at different cost levels designed to meet nutritional requirements, including a restricted plan intended for emergency relief. The approach, translating nutrient requirements into quantities of familiar food groups and then pricing them, has remained the structure ever since. The Economy Food Plan, the lowest cost version of the 1960s, acquired unexpected significance when Mollie Orshansky of the Social Security Administration used it in 1963 and 1964 to construct the American poverty thresholds, multiplying the plan cost by three on survey evidence that families spent about a third of income on food. The Thrifty Food Plan replaced the Economy plan in 1975 and became the statutory basis for the maximum benefit in the Supplemental Nutrition Assistance Program, which is why its cost is recalculated and published every month using national food price data. For decades it was re-estimated only at constant real cost; the 2018 Farm Bill directed a full re-evaluation, and the revision issued in August 2021 raised the plan's real cost for the first time since 1975, increasing SNAP benefits by roughly a fifth. The Low-Cost, Moderate-Cost and Liberal plans, updated in the same review, are not used for benefits but are widely used as household budgeting benchmarks, which is the role they play here.