Food stamp value declines as grocery costs rise

CHICAGO – Markita Barrett is a single mother and has all she can handle with two daughters, ages 10 and 22 months, and her pending college graduation. Still, she can’t stop thinking about cows.

“I don’t know what they’re doing with these cows,” said Barrett, expressing frustration with the rising price of a gallon of milk, which has jumped 14 percent in the past year. “What do these animals need? What physically are they doing differently?”

They’re the same old cows, but they’re eating high-priced corn, which is at the root of food price inflation afflicting every American but perhaps more acutely those on food stamps who, like 35-year-old Barrett, watch their buying power erode every month.

Food stamp usage has hit a new high and more Americans than ever – a record 28 million is projected for this year – are using them, but with the spike in food prices, the monthly food allowance doesn’t go nearly as far. Moreover, food stamps are being used up earlier and earlier in the month by those who receive them, even as the galloping price of gasoline is aggravating the cost squeeze, draining discretionary income that had been used by many to buy food after the stamps ran out.

Annual adjustments are made in the purchasing power of food stamps, but they have not kept pace with increases in food inflation.

“It’s a huge problem,” said Diane Doherty, executive director of the Illinois Hunger Coalition. “People are having trouble putting together halfway decent meals.”

Kim Allen, 45, said the $408 she receives in food stamps for herself and two daughters, ages 17 and 7, usually lasts until about the 15th of each month. Allen lost her job as a temporary dispatcher in February and soon after, lost her car. She is struggling to pay the $1,150 rent for her three-bedroom home.

“I have to be very, very cautious to make it stretch,” Allen said.

She visits local food pantries in the northwest suburbs to keep food on the table until the first of the month, when she receives her new allotment.

“We’ve cut back a lot,” Allen said. “We have cut back the butter consumption a lot. I do not buy eggs as often as I used to because I refuse to pay over $2 for a carton of eggs. … I’m not going to (spend) $5 for a box of cereal.”

Food price inflation began to take off in 2007, with price spikes not seen since 1980.

Food prices have jumped an average 5.5 percent in the past six months and, according to America’s Second Harvest, which oversees the national network of food banks, are projected to rise 7.5 percent annually in each of the next five years. That’s triple the inflation rate of 2002 through 2006.

“While the precise yearly levels of food inflation are difficult to predict, increased commodity prices clearly suggest that food prices will be rising more dramatically during the next five years,” the organization said in a recent report.

America’s Second Harvest reports the number of people seeking food at pantries and kitchens shot up an average of 20 percent in the past year. Some pantries haven’t been able to handle the demand, and some have temporarily closed because their shelves are empty.

“It’s a perfect storm of rising food prices, the erosion of the economy, higher energy prices and the declining food stamp benefit,” said Stacy Dean, director of food assistance policy for the Center on Budget and Policy Priorities.

Corn figures into the equation because more farm acreage is being used for the development of ethanol. That shift has caused the price of corn to soar to about $6 per bushel from an average of $2.40 per bushel over the past three decades.

Higher corn prices mean it costs more to feed cattle, and that spurs inflation and a consumer cost squeeze: Most food stamp recipients will run through their monthly food allowance in about two weeks. Then they’ll go to food pantries to carry them through the month.

The problem is, pantries across the nation are dealing with their own issues of food price inflation, declining donations and increasing demand.

The number of people on food stamps has been growing steadily, from 21.2 million in 2003 to 26.5 million in 2007, according to the Department of Agriculture.

In the past year, the number of Americans receiving food stamps has risen by 1.3 million.

As a percentage of the population, there were more people on food stamps in 1994, when 27.5 million received the food allowance.

But in 1994, the nation had emerged from a recession and the average price of gasoline was less than one-third today’s prices, ranging between $1 and $1.13 per gallon.