Families Struggle With High Food Costs Despite SNAP Benefits: Report

Customers shop for eggs at an H-E-B grocery store in Austin, Texas, on Feb. 8, 2023. Brandon Bell/Getty Images

Government food benefits are not meeting the needs of low-income American families as they struggle with high food costs triggered by persistent inflation, according to a recent report by the Robert Wood Johnson Foundation.

The Supplemental Nutrition Assistance Program (SNAP) is a government initiative that provides food benefits to low-income families. The U.S. Department of Agriculture (USDA) calculates the annual cost of living adjustments (COLA) for the SNAP program at the beginning of every fiscal year after taking economic inflation into account. In 2023, USDA COLA adjustments had “little effect on the generosity of SNAP benefits,” the May 20 report said.

SNAP benefits “did not cover the cost of a modestly priced meal in 98 percent of U.S. counties last year.”

In the fourth quarter of 2023, SNAP’s average maximum benefit of $2.84 per meal was found to be 53 cents (19 percent) lower than a modestly priced meal of $3.37. During the first three quarters of the year, SNAP benefits were $58.59 short of monthly food costs.

The gap between the cost of a meal and the SNAP benefit was larger in urban regions compared to rural areas. The five counties with the largest gaps were New York County, New York; Leelanau County, Michigan; Teton County, Idaho; and Dukes and Nantucket Counties, Massachusetts. In these places, the gap was around 70 percent throughout 2023.

The report warned that any further reduction in SNAP funding would reduce the ability of program beneficiaries to access healthy and nutritious food even more.

The inability of SNAP benefits to cover the cost of a modest meal follows price inflation which has significantly impacted everyday commodities. Under the Biden administration, the Consumer Price Index (CPI) has risen by over 19 percent.

Grocery costs have risen to such a degree that many families are taking on debt to pay bills, according to a May 15 analysis by the Urban Institute.

The analysis found that 60.5 percent of U.S. adults reported using credit cards when buying groceries in 2023. This included 20 percent who failed to pay the full balance of their credit dues and kept on making only the minimum required payments. Moreover, 7.1 percent could not make their minimum payments.

Adults who experienced “very low food security” last year were more likely to rely on payday loans and savings for grocery purchases while facing difficulties in repaying debts.

Among such individuals, 51.3 percent used up savings to pay for food. Half of the people who bought groceries with the “Buy Now, Pay Later” option missed a payment. One in 10 individuals used cash from payday loans to purchase groceries.

High Interest Rates and Panic Buying

In response to rising inflation, the Fed has pushed up interest rates from almost zero in early 2022 to a range of 5.25 to 5.5 percent.

The high rates combined with elevated inflation is putting tremendous pressure on the American economy and households. Though the Fed has suggested that it intends to reduce interest rates, the agency has not yet announced a plan or timeline.

During the recent April 30-May 1 Federal Open Market Committee (FOMC) meeting, members raised concerns over sticky inflation. Such a situation could delay the Fed from implementing rate cuts.

“Participants observed that while inflation had eased over the past year, in recent months there had been a lack of further progress toward the Committee’s 2 percent objective,” said the minutes of the meeting.

“The recent monthly data had showed significant increases in components of both goods and services price inflation.”

A recent survey by the University of Michigan showed that Americans do not expect inflation to ease down anytime soon. Expectations of year-ahead inflation among survey participants increased from 3.2 to 3.5 percent. Long-run inflation expectations saw a marginal increase, rising from 3 to 3.1 percent.

Higher inflation expectations by consumers can be bad for the economy. If consumers expect higher prices in the future, they are likely to engage in panic buying and demand higher wages for their work. These two things will end up worsening inflation.

A May 2 Gallup poll found that the percentage of Americans who listed inflation as the most important problem facing their family reached a new high for the third year in a row in 2024. This year, 41 percent of respondents listed high cost of living as a top issue, up from 35 percent last year and 32 percent in 2022.

In a May 21 statement, President Biden said that fighting inflation and lowering costs was his “top economic priority.” While inflation has tumbled over 60 percent from its peak, prices are “still too high.”

The president said his agenda to build two million new homes, taking on “Big Pharma” to lower drug prices, and calling on grocery chains making “record profits” to bring down prices will give American families some “breathing room.”

Senate Republican Leader Mitch McConnell (R-Ky.) slammed the Biden administration for failing to control inflation and making the lives of Americans tougher.

“Inflation in January 2021 was 1.4 percent. As of this month, prices have increased 20 percent since then,” he said in a May 16 remarks at the Senate floor.

“By one estimate, the average U.S. household has to spend an additional $1,074 every month to keep up the same standard of living they had when President Biden took office.”