Food Inflation - Higher Or Lower Than CPI?

Many claim that food doesn't make up enough of the Consumer Price Index, and is one reason the CPI is artificially low. CPI includes many things like electronics which many claim skew the CPI to make it look lower than the actual inflation. If you're living off your savings, the price of food is a lot more important than the price of electronics.

The Chicago Boyz blog post has an interesting report on how food prices have changed in the last 30 years. It shows that food prices haven't gone up as you might have expected.

Of course you can't put too much into this post, but other sources also show that food hasn't gone up that much in 30 years. This data from the US Department of Commerce shows that food prices have gone up less than 3% per year over the last 30 years. The index for food and nonalcoholic beverages purchased for off-premises consumption went up from 49.065 in 1979 to 114.102 in 2009. A 3% per year increase would have resulted in the index to be 119.094 in 2009.

Credit for this find goes to this Bogleheads thread. This thread also has some good discussion of this issue.