Farm Water and Food Costs

Farm Water and Food Costs

The average American household is spending $3,820 less for food each year in comparison to their counterparts around the world.food cost ad web-2

A CFWC study compared spending habits of American households with those in 28 high-income countries across the globe.  U.S. households spent approximately $5,945, or 6.2 percent, of their disposable income on food and non-alcoholic beverages each year.  That number climbed to $9,765, representing 10.2 percent for foreign incomes.

Farmers are playing a pivotal role in keeping food costs down for families worldwide and especially here in California.

According to California Department of Food and Agriculture and Department of Water Resources statistics, California farmers have increased their production by 89 percent from 1967 to 2000 while only using 2 percent more applied water per acre.

How many acres a farmer plants is in direct response to market demands but when water supplies are reduced, then less acres are planted and the economic theory of supply and demand takes over for the consumers pocketbook. That is why a reliable supply of water is so important to our farmers.

Worldwide Comparison

The economic study identified 28 countries with per capita incomes equaling at least $11,115, which represents 45 percent of the U.S. income level.  The countries included:  Australia, Austria, Belgium, Canada, Cyprus, Denmark, Finland, France, Germany, Hong Kong, Iceland, Ireland, Italy, Japan, Kuwait, Luxembourg, Malta, Netherlands, New Zealand, Norway Portugal, Qatar, Singapore, Spain, Sweden, Switzerland, Taiwan and the United Kingdom.

Data from the World Bank was used in selecting the countries.  All of the data from the foreign countries was converted to 2005 U.S. dollars.

More Money for Vacations

On a percentage basis, households in high income countries are spending about 64 percent more on food and beverages compared to the U.S.

Families are saving almost $4,000 in food costs compared to others around the world.  If the cost for food went up, then that means there would be less money to spend on other items such as entertainment, dance lessons, vacations and more.

Wade explained that farmers are increasing their water use efficiency with the introduction of increased technology, such as micro irrigation systems and even the use of satellites to monitor field conditions.

California farmers are committed to providing a healthy and affordable food supply to consumers.  Without a reliable water supply then those efforts are in jeopardy.  That is why California’s water infrastructure and conveyance systems must be modernized.”

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Geographic Scope

A U.S. Department of Agriculture report was utilized in selecting the 28 high-income countries as part of the food costs study.  The report—International Evidence on Food Consumption Patterns, an Update Using 2005 International Comparison Program Data—examined factors that influenced food demand among countries with differing income levels.

A high-income country was defined as one with a per capital income equal to or greater than 45 percent of the U.S. level or per capita gross national incomes above $11,115.  The countries selected for the food costs study were:

Australia                           Austria                     Belgium                  Canada                Cyprus
Denmark                          Finland                     France                    Germany             Hong Kong (China)
Iceland                             Ireland                      Italy                         Japan                  Kuwait
Luxembourg                   Malta                         Netherlands           New Zealand     Norway
Portugal                           Qatar                         Singapore               Spain                   Sweden
Switzerland                     Taiwan (China)       United Kingdom

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Data Sources

The primary data source used for this analysis was obtained from a report published by the World Bank titled Global Purchasing Power, Parities and Real Expenditures prepared as part of the 2005 International Comparison Program (ICP). The ICP report includes a global dataset that can be used to compare economic activity and price levels between economies in different regions.  Included as part of the dataset were statistical indicators on Gross Domestic Product (GDP), total consumption spending, and food/non-alcoholic beverage spending, which were used to compare price data and estimated purchasing power parities of the world’s economies.  All of the data were benchmarked to 2005 regardless of the year in which the data were collected and all currency was reported in 2005 U.S. dollars.