PREFACE Food constitutes one-third or more of the total annual expenditures of wage earners. Changes in the cost of all foods or in the cost of a single group of related foods such as cereals, meats, or dairy products, are of prime importance not only to customers but also to Federal or private agencies responsible for policy determination. They are also of significance to industrialists and labor organizations interested in maintaining adequate wage levels, and to many other groups studying a wide range of problems dealing with food costs. The Bureau of Labor Statistics has collected retail prices of food in large cities for use in the computation of a food-cost index since 1903. This index has constituted one of the groups in the indexes of changes in the cost of living of wage earners and lower-salaried workers. From time to time, the food-cost data have been assembled and published in bulletin form. The last bulletin, No. 495, was published in 1929. It contained detailed statistics for the years from 1913 to 1928, inclusive. Many changes have taken place during the intervening years. Merchandising practices have been modified; consumer interest has increased; and statistical methods have been more highly developed. As a result of these changes, the Bureau has revised both the content and methodology of its indexes of the retail cost of food. Insofar as possible, these revisions have been carried back through the year 1923. This bulletin contains indexes and average prices for the years from 1923 to 1936, inclusive. It was prepared in the Retail Price Division, under the direction of Stella Stewart, Chief of the Division, with the assistance of Ethel D. Hoover. The consumption weights and the population weights used in the computation of the indexes were computed in the Cost of Living Division under the direction of Faith M. Williams. ISADOR LUBIN, Commissioner of Labor Statistics. OCTOBER 1937. V Bulletin No. 635 of the United States Bureau of Labor Statistics Retail Prices of Food, 1923-36 Introduction The last comprehensive report of the Bureau of Labor Statistics on retail prices and costs of food was published in 1928, as Bulletin No. 495. In 1935, major changes were made in this phase of the statistical work of the Bureau. These changes involved the modification of the food consumption weights, a different method of computing indexes for cities combined, the shift of the base from the average for 1913 as 100 to the 3-year average 1923-25, and an increase in the number of foods included in the indexes. This bulletin contains a detailed statement of these changes, together with average prices and indexes for the years from 1923 to 1936, inclusive. Changes in Food Costs, 1923-36 A study of food costs during the years from 1923 to 1936 reveals four major movements. There was a gradual rise from 1923 which reached its peak in November 1925. This was followed by a period of comparative stability which extended until the break in November 1929. This break was the beginning of a long movement downward. The lowest level was reached in the first quarter of 1933. The reversal of this trend in April 1933 was the beginning of an advance in food costs which continued until September 1936. Compared with the 3-year average 1923-25 as 100, the indexes for all foods ranged from 112.6 in November 1925 to 59.8 in March 1933. In September 1936, the index was 84.3. Changes in the combined indexes, as just cited, are greatly influenced by changes in the four most important commodity groups-the "Meats" group which ranks first in importance and accounts for about one-fourth of the total food cost; and "Cereals and bakery products," "Dairy products," and "Fruits and vegetables," each of which constitutes approximately one-fifth of the total food cost. These four groups combined make up about 85 percent of the total food-cost aggregate. Prices of cereals, meats, and fruits and vegetables rose from 1923 through 1926. From 1926 to 1929, meats continued to advance while the cost for other groups declined or showed little change. Fruits and vegetables declined the most. All groups contributed to the general moverment downward from 1930 to 1933 and all joined in the advance which was shown in 1934. During 1935 the advance continued for cereals, meats, and dairy products, but lower costs were shown for fruits and vegetables. The continued advance in the combined index in 1936 was altogether due to higher costs for dairy products and a price upturn for fruits and vegetables. Indexes for all other groups averaged lower in 1936 than in 1935. The average annual indexes of retail food costs in 51 cities combined for all foods and for each of the eight food groups, from 1923 to 1936, are presented in table 1. The trend during these years is shown by the charts on page 3. TABLE 1.-Indexes of retail food costs in 51 cities combined by commodity groups— annual averages, 1923–36 A discussion of the movement of costs for each of the commodity groups follows: Cereals and bakery products. From 1923 to 1936, the cost of cereals and bakery products was relatively more stable than were costs for other commodity groups. The index reached its upper limits in 1925 and 1926, averaging slightly more than 105.0, and prices of seven of the eight items included in the index reached their highest levels. The index for flour went to 123.1; corn meal reached 115.7; and bread, 103.7. From 1927 through 1932, there was a gradual decline to the low of 69 and a fraction during the first 4 months of 1933. The index for flour declined to 55.0 and rice fell to 54.5. Other items declined less. There was a reversal of the downward trend in May 1933 and the year ended with the index for cereals and bakery products at 86.4. The upward movement continued through 1934 and 1935 to the level of 95.6 in December 1935. In 1935 the index for flour went to 102.8, for bread to 95.9, for corn meal to 109.7, and for rice to 84.4. Costs were somewhat lower in 1936 due chiefly to a decline in the prices of flour and bread. |