What’s a reasonable amount to spend on food per month?
Though a simple question on the surface, it’s difficult to answer as it depends on so many factors: age, sex, geographic location, dietary preferences, education, ability and willingness to cook, and many others.1
Given the many variables, the only way to come up with some sort of answer is to take the mythical “average” American and attempt to figure out how much money it would take to feed them a healthy diet on a constrained budget.
Luckily, this is exactly what the USDA—U.S. Department of Agriculture—has been doing since the 1960’s.
In 1962, the USDA released the Economy Food Plan2 and in 19753 they replaced it with the Thrifty Food Plan.4 The Thrifty Food Plan was then updated in 19835, 1999, and 20066 to account for changes in dietary guidance, food prices, and consumption patterns.
A key point to note is that the Thrifty Food Plan was required to remain cost-neutral relative to the 1962 plan, meaning that while the foods incorporated into the plan could change, the only adjustment to the cost was driven by inflation.
The 2018 Farm Bill7 eliminated the cost-neutral requirement, however, and mandated that the Thrifty be updated by 2022 and every five years thereafter to reflect current food prices and dietary guidance.8
Without the cost-neutral requirement, the USDA got to work on re-answering the question, What is a reasonable amount to spend on groceries?9
Their answer is the Thrifty Food Plan, 2021.
How was the Thrifty Food Plan created?
For the 2021 Thrifty, as there was no cost-neutral requirement, the USDA started by creating a healthy, practical diet and only then figured out how to meet these dietary requirements at the lowest cost.
“Healthy” means the USDA followed the guidance from the Dietary Guidelines for Americans, 2020-2025 and the National Academies of Sciences, Engineering, and Medicine’s (NASEM) Dietary Reference Intakes (DRI).
“Practical” means that not every item is prepared from scratch.
For example, the average person is more likely to purchase canned beans than dry beans even though they’re more expensive because canned beans are ready to eat unlike dry beans which must be cooked.
To do this, they divided the American population into 15 age-sex groups and for each group created a Market Basket10—weekly amounts of foods in purchasable form—that met the dietary requirements.
There are five groups for children (ages 1, 2 to 3, 4 to 5, 6 to 8, and 9 to 11) and five groups for each males and females (ages 12 to 13, 14 to 18, 19 to 50, 51 to 70, and 71 and over).
All foods are prepared at home, though not necessarily from scratch as the 2021 Thrifty takes convenience and ease of preparation into account.
This means that items such as canned beans are favored over dry beans because while dry beans are cheaper, they require time and effort to cook.
Following SNAP regulations, foods that are hot when bought (e.g., roasted chicken), foods purchased at restaurants or fast-food chains, and alcoholic beverages are all excluded.
A deeper dive into the creation of the Thrifty Food Plan, 2021
The above is a good summary of how the Thrifty Food Plan, 2021 was created but, if you’re a nerd like me, it leaves open questions. So let’s dive a little deeper.
A quick look at optimization models
The “brain” of the Thrifty Food Plan is an optimization model created by a team of USDA economists.
The math behind optimization models is highly complex, but the concept is simple—given a problem and a set of inputs and constraints, the optimization model attempts to find the best solution.
For example, a shipping company wants to deliver its packages at the promised speed and has an optimization model to help them meet this goal.
The inputs to the model might include the distance the package has to travel as well as available transportation methods (e.g., air, land, or sea), while the constraints might include a price limit (e.g., under $2 per package), the promised delivery speed (e.g., 2-day shipping), and following the law (e.g, not speeding or running red lights).
Based on these inputs and constraints, the optimization model generates a list of possible solutions.13
For example, for a small package that needs to go from Austin to Houston within a week, the model might suggest transporting the package by truck and waiting until the truck is full to lower the cost.
For the USDA optimization model, the inputs were current consumption patterns and the nutrient composition and average price of each food item, while the constraints were practicality, cost, and dietary requirements.
The inputs to the Thrifty Food Plan
Let’s look at the three inputs of the Thrifty’s optimization model: current consumption patterns, food prices, and food nutrient composition.
In order to determine current consumption patterns, the USDA used the data collected in the What We Eat in America (WWEIA) survey. This data is the best source for total food and beverage consumption in the US and can be used to get a good feel for the day-to-day diet of Americans.14
The WWEIA—first conducted in 2002—is administered annually to 5,000 people, a diverse sampling meant to accurately represent the demographics of the US population.15
The participants record everything they eat over a 24-hour period, along with amounts, times, and where the food was obtained. This is done twice, on different days of different weeks, and the participants are interviewed by the researchers for each collection period—the first time in person and the second by phone.16
The USDA divided the WWEIA respondents into the 15 age-sex groups and excluded those with diet qualities below the median.17
This input served to create Market Baskets that, while healthy, didn’t suggest unrealistic deviations from current consumption patterns, meaning that if a food item is rarely eaten, then it’s not part of any Market Basket, even if the item is healthy and cheap.
For price data, the USDA relied on data from the IRI InfoScan.18
The IRI InfoScan uses in-store scanners to track all food items sold at their affiliated retailers—grocery stores, convenience stores, and dollar stores, among others—providing a clear picture of the amounts and costs of the food and beverage items purchased in the US.
Using this data, the USDA derived national average unit prices for each food and beverage item while considering food form and customer preferences.
For example, beans, whether in canned or dry form, were considered as a single item and since canned beans are purchased more often than dry beans, the average price for beans is closer to that of canned beans.
Similar cases apply to other foods sold in various forms, such as ready-to-serve juice—more expensive, but more commonly consumed—versus frozen juice from concentrate.
When calculating prices, the USDA even considered the detail of edible weight versus the retail weight for each food item.
For example, a pound of celery from the store won’t yield a pound of edible celery once the leaves and the base of the stalk are removed meaning that the actual cost of a pound of celery is slightly greater than the retail cost.
Finally, the USDA Food and Nutrient Database for Dietary Studies (FNDDS) was used to determine the nutrient composition of each of the food and beverage items.
At this point, the USDA knew what foods Americans eat—and in what form and proportion—the price they paid for these foods, and the quality of their diet.
The constraints for the Thrifty Food Plan
Let’s now look at the three constraints of the Thrifty’s optimization model: dietary requirements, practicality, and cost.
There are two components to the dietary requirements: energy (number of calories required) and nutrient recommendations (the macro and micronutrients required.)
Calorie needs for each of the 15 age-sex groups were determined by using median heights and weights for the U.S. population and assuming a low physical activity level for all groups except for children ages 2 through 11, for whom an active level of physical activity was assumed.19
Nutrient recommendations are based on the Healthy U.S.-Style Dietary Pattern which in turn is based on the Dietary Guidelines for Americans, 2020-2025 report. These guidelines establish DRIs—Dietary Reference Intakes—for macronutrients (i.e., protein, carbs, and fats), micronutrients (i.e., vitamins and minerals), and other food components (e.g., dietary fiber).20
For example, the DRI recommends deriving 45-65% of one’s calories from carbs—for a male in the 20 to 50 range, for instance, this translates to 338 to 488 grams of carbs per day.
To account for food waste (i.e., plate waste and spoilage), the calorie needs and nutrient recommendations were increased by a 5% food-waste-adjustment factor.
The USDA then applied practicality constraints to better reflect consumption patterns and to meet the nutrient recommendations for food-groups—vegetables, fruits, grains, dairy, protein, and oils—and food-subgroups—dark green vegetables, starchy vegetables, whole grains, refined grains, etc.21
This constraint prevented the optimization model from recommending a diet mostly composed of eggs and beans, which are nutrient-dense, cost-effective ways to meet the recommended daily nutrient values, and allowed for the creation of a Market Basket that includes vegetables, fruits, and other sources of protein.22
It also allowed the USDA to add coffee and tea to the Market Basket for adults as the majority of Americans consume at least one cup per day. The optimization model would have otherwise excluded coffee and tea as they don’t provide many nutrients.
Finally, the USDA applied a cost constraint. The cost of the 2006 Thrifty Food Plan, after being adjusted for inflation, served as the starting point. This constraint was then increased in increments of $0.01 until the model generated a viable Market Basket for each age-sex group.
What are the findings of the Thrifty Food Plan?
$835.57 per month for a reference family of four—a male and a female, age 20 through 50, and two children, one age 6 through 8, the other age 9 to 11.
This is the amount the Thrifty Food Plan, 2021 concluded is required to provide a nutritious diet for a resource-constrained household.
After adjusting for inflation, this represents a 21% increase from the Thrifty Food Plan, 2006, equivalent to an extra $1.20 per person per day.
One reason for the increase is the 600 additional calories per day due to the increase in median weight for adults since 2006 as well as the decision to change the activity level for children under 12 from low-active to active.
Another reason is the updated guidance in the Dietary Guidelines for Americans. In particular, the increase in the recommended amounts of seafood had a marked effect as seafood is among the more expensive food-subgroups.
The 2021 Thrifty Food Plan is a good starting point for discussion.
As I don’t have children, I can’t comment on the validity of the $835.57 figure. Instead, I’ll look at the Market Baskets for a male and a female age 20-50 to reflect the 2-person household for my wife and I.
The monthly cost of the Market Basket is $258.46 for a male and $207.38 for a female, for a total of $465.84. A two-person household, however, has a 10% adjustment factor23 meaning our total budget would be $512.42.
At first glance, this number seems ridiculously high given that my wife and I spend around $200 on groceries per month. It’s even more ridiculous when we consider that the thrifty plan is the lowest cost plan—the low-cost plan would let us spend $529.70, the moderate-cost plan $655.70, and the liberal plan $820.30.24
We’re both active, health-conscious individuals—we walk around 5 miles every afternoon, run or do weights a couple of times a week, avoid added sugar and processed foods, and only drink water, coffee, and tea. Our weight and bloodwork are in the healthy range.
The matter of privilege, of course, can’t be ignored. We own a car and have a Costco, an Aldi, and a Walmart within twenty minutes. We also have the time, willingness, and education to meal prep on the weekends. These are advantages not everyone is fortunate enough to have.
Finally, there’s the fact that we’re price conscious and very good at avoiding food waste and shopping in season. And we eat a vegetarian diet which replaces the more expensive categories of meat, poultry, and seafood with tofu, beans, and nuts.
I mention all of this for two reasons. One, to show that it’s complicated to compare individual cases to the baseline. And two, to show that with a few small optimizations even the “thrifty” food plan budget can easily be cut in half for many people.
All in all, while the inputs and constraints of the Thrifty Food Plan make sense when looked at individually, the result given by the optimization model seems excessive.
I wonder how the results would change if grocery store constraints were added (i.e., shopping at Aldi instead of Whole Foods) and the nutrient recommendation constraints were relaxed as it’s possible to be perfectly healthy without eating the exact recommended food-group and -subgroup amounts recommended by the dietary guidelines.
Hopefully this extensive look into the Thrifty Food Plan was at least somewhat interesting. As a followup, I’ll be writing a post soon to share how we eat a healthy diet on $200 a month.
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It’s easy to see how the reasonable monthly spend for a thirty-year-old male living in the middle of nowhere without reliable transportation will be different than for a family of four living in the suburbs with parents who have solid income and are willing and able to spend time cooking. ↩
The Thrifty Food Plan is important as it defines the benefits provided by the Supplemental Nutrition Assistance Program (SNAP). SNAP was known as the Food Stamp Program until its name was changed as part of the Food, Conservation, and Energy Act of 2008.
Close to 42 million Americans participated in SNAP in 2021, 68% of whom were children, people with disabilities, or elderly. ↩
The Thrifty Food Plan, 2021 says in its conclusion, “The methods used for the Thrifty Food Plan, 2021 respond to the fundamental purpose of this update: to determine the cost of a nutritious diet for resource-constrained households that is practical and includes a variety of nutrient-dense foods and beverages.” ↩
With the exception of Alaska and Hawaii which have separate Thrifty Food Plans. ↩
In some cases, there might not be a fitting solution. For example, it’s impossible to ship a fridge from California to Florida within one day at a cost of under $1. In this case, the constraints—the delivery speed and/or the price limit—would have to be relaxed until a solution is possible. ↩
Unlike previous Thrifty Food Plans, the Thrifty Food Plan, 2021 used WWEIA data for all income levels rather than only low-income respondents—those at 130% or below the poverty threshold—to better reflect consumption patterns.
The 2021 Thrifty says, “It is not possible to know whether the current consumption patterns of low-income households reflect their preferences, if their choice of foods and beverages results from the budget constraints they face, and if other factors, such as access to transportation or to grocery stores, play a role.” ↩
IRI InfoScan is short for Information Resources Inc. Retail Scanner Data.
As with the WWEIA data and unlike previous Thrifty Food Plan editions, the Thrifty Food Plan, 2021 extended the income range from 130% of the Federal Poverty Guideline to 350% when analyzing price data.
The 2021 Thrifty says, “In analyzing the data for the 2021 reevaluation, USDA considered price data from all incomes and consumption shares from a broader income range (i.e., consumption shares of those above 350 percent of Federal Poverty Guidelines were removed). Doing so allowed preferences of shoppers who were budget-conscious but were not as constrained as only the lowest income consumers.” ↩
You can see all food-group and food-subgroup in Table A3.5. Healthy U.S.-Style Dietary Pattern food-group and -subgroup amounts constraint for each Thrifty Food Plan age-sex group of the 2021 Thrifty report. ↩
The 2021 Thrifty says, “The design of the optimization model is such that without additional constraints for practicality (i.e., a range of typical consumption), the solution includes only a limited number of foods considered highly efficient (e.g., beans) at meeting one or more of the model’s constraints, such as cost or nutrient requirements.” ↩
A 1-person household has a 20% adjustment factor, a 2-person household has a 10% adjustment factor, a 3-person household has a 5% adjustment factor, a 4-person household—the reference family—has a 0% adjustment factor, a 5- or 6-person household has a -5% adjustment factor, and households of 7 or more have a -10% adjustment factor. See note 3 at the bottom of each monthly Thrifty Food Plan. ↩
See the Official USDA Food Plans: Cost of Food at Home at Three Levels, U.S. Average, June 2021. Note that the monthly costs for a 2-person household have a 10% family size adjustment factor. ↩