Why is American Food So Cheap?

There are a lot of reasons why obesity has taken off over the last 30 years, but one very obvious reason is that food -- especially fat food -- is so cheap:

Food is cheaper here than almost anywhere else. In 2007, only about 6.9 percent of U.S. consumer spending went for food at home; Germans spent more (11.4 percent), as did Italians (14.5 percent) and Mexicans (24.2 percent). On the other hand, low food prices may contribute to Americans' obesity. In 2006, about 34 percent of U.S. adults were judged obese, triple France's rate (10.5 percent) and four times that of Switzerland (7.7 percent)

But why is food so cheap in the United States?


As Bryan Walsh explains in this excellent TIME article, it starts with corn. American corn production has tripled in the past 40 years, from 4 billion bu. in 1970 to 12 billion. Billions of dollars of subsidies have injected steroids into corn production, and our farmers have injected chemicals into our fields -- "American farmers now produce an astounding 153 bu. of corn per acre, up from 118 as recently as 1990." Money might be scarce, but cheap food is abundant. As a result, food expenditures as a percentage of income have fallen by half in the last half-century, and obesity rates have doubled.

Two graphs, just to drive the point home. The cheap food revolution hasn't just given low-income families cheaper options. It's come at the expense of healthier food. A dollar today buys 1,200 calories of potato chips and 250 calories of vegetables or 170 calories of fresh fruit. Walsh gets it right: "it simply costs too much to be thin."

graph fat food.pngThe cheap food revolution has aided the fast food revolution. Countries with fast food chains that piggy-backed on the corn boom have become more efficient eaters. But we're learning to be efficient in the wrong ways. By cramming as many calories into a dollar and a minute as possible, our evolutionary instinct to maximize our calorie intake is suddenly working against us.

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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