Family Economics Review [1967, Number 4]

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Consumer and Food Economics Research Division Agricultural Research Servic•~
UNITED STATES DEPARTMENT OF AGRICULTURE lliill!lliillmlillliiillilm~IIR
ANNUAL OUTLOOK ISSUE
CONTENTS
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THE CONTENTS OF THIS ISSUE -------------------------------- 3
CONSUMPTION, PRICES, AND EXPENDITURES FOR FOOD------- 3
HOUSEHOLD USE OF CONVENIENCE FOODS -------------------- 6
PROTECTING CONSUMERS THROUGH RESEARCH---------------- 8
EXPENDITURES FOR FOOD AWAY FROM HOME----------------- 10
A STATE PROGRAM OF CONSUMER PROTECTION--------------- 12
TRENDS IN RETAIL PRICES ----------------------------------- 15
THE FEDERAL MEDICARE PROGRAM -------------------------- 17
CONTINUING CONSUMER PROTECTION AT THE FOOD AND DRUG
ADMINISTRATION------------------------------------------ 20
SOME NEW USDA PUBLICATIONS ------------------------------ 22
CONSUMER PRICES --------------~---------------------------- 23
COST OF FOOD AT HOME --- ---------------------------------- 24
ARS 62-5
December 1967
FAMILY ECONOMICS REVIEW is a quarterly report on research of
the Consumer and Food Economics Research Division and on infor­mation
from other sources relating to economic aspects of family
living. It is developed by Dr. Emma G. Holmes, research family
economist, with the cooperation of other staff members of the Divi­sion.
It is prepared primarily for home economics agents and home
economics specialists of the Cooperative Extension Service.
THE CONTENTS OF THIS ISSUE
This issue of FAMILY ECONOMICS REVIEW includes condensed versions of several
papers presented at the 45th Annual Agricultural Outlook Conference, which was held in
Was_hington, D. C,, November 13 to 16, 1967. If you wish the complete text of any of the
papers, send your request to the Consumer and Food Economics Research Division,
U.S. Department of Agriculture, Federal Center Building, Hyattsville, Maryland 20782.
Please give the titles of the papers desired, and include your ZIP code number with your
return address.
The following Outlook Conference papers, not included in this issue, may be of
interest to home economists. Single free copies may be obtained from the address given
above.
PRACTICES IN THE USE OF HOME FREEZERS, by Ruth Redstrom, USDA
NEW BLS STANDARD BUDGETS AND LIVING COST INDEXES, by Helen H.
Lamale, U.S. Department of Labor, Bureau of Labor Statistics
NEW DEVELOPMENTS IN MEAT INSPECTION, by Robert K. Somers, USDA
FEDERAL TRADE COMMISSION CONSUMER PROTECTION ACTIVITIES, by
Gale P. Gotschall, Federal Trade Commission
HIGHWAY SAFETY, by Werner Siems, U.S. Department of Transportation
PEOPLE IN CHANGING RURAL AMERICA--WHAT IS AHEAD? by Max F.
Jordan, USDA
NATIONAL ECONOMIC SITUATION AND OUTLOOK FOR 1968, by John W.
Kendrick, George Washington University
A NEW LOOK AT THE WORLD FOOD SITUATION, by Martin E. Abel, USDA
CONSUMPTION, PRICES, AND EXPENDITURES FOR FOOD
Stephen J. Hiemstra, U.S. Department of Agriculture
Food Expenditures and Prices
Food expenditures in 1967 are expected to total about $96-1/2 billion, up from
$93 billion in 1966. Much of the increase is due to higher volume of purchases, with
only a small increase in prices. In 1968, a similar gain in expenditures is likely, due
mostly to price increases with little increase in volume.
Retail food prices rose 2 percent during third quarter 1967. The increase more
than offset the decline that set in late in 1966 and carried into the second quarter of
1967. Third-quarter food prices averaged about 1 percent higher in 1967 than in 1966.
All of the price increase was due to 5-percent higher prices for food away from home.
DECEMBER 1967
3
Prices at food stores were practically the same as a year earlier. On balance, food
prices likely will average about stable or perhaps even slightly higher in the fourth
quarter than in the third quarter.
For 1967 as a whole, retail prices in food stores are averaging about steady with
1966. Prices for all livesto.ck food products are averaging about 1 percent lower than
in 1966. Prices are substantially lower for eggs, poultry, and pork products, but higher
for dairy products and fish (fig. 1). Prices for food from crops are averaging about
1 percent higher than in 1966. Higher prices for potatoes, fresh fruits, sugar and
sweets, and cereal and bakery products are more than offsetting lower prices for proc­essed
citrus fruits, coffee, and fats and oils (fig. 2).
Prices for food purchased in restaurants and other away-from-home establish­ments
are averaging about 5 percent higher than in 1966. These prices represent about
one-fifth of the total retail Food Price Index. Overall food prices are advancing about
1 percent in 1967, compared with a more than 3 percent increase for nonfood consumer
items.
Retail food prices likely will increase noticeably in 1968, reflecting some increase
in prices for farm products and advances in farm-retail margins. These margins stabi­lized
during the first three quarters of 1967 at about 1 percent below the fourth quarter
1966 level. However, widening farm-retail margins are likely in 1968 because of ex­pected
increases in wages and prices for other factor inputs of food marketing firms.
Uncertainties about the volume of farm marketings and amount of increase in non­food
prices make it difficult to tie down a precise estimate of food prices in 1968. The
best estimate at this time indicates a rise of 2 to 3 percent from 196 7. This implies
little change in output of food and an increase in nonfood consumer prices of around
3 percent.
Supply and Utilization of Farm Food Commodities
Total civilian food use in 1967 is advancing more than 2 percent from the 1966
level. Military food takings also are larger but exports and nonfood uses are declining.
Utilization of farm commodities in 196 7 likely will total about the same as in 1966. Use
of crop food products is less than in 1966, but use of livestock products is much larger.
While total utilization of farm food commodities has been stable in 1967, net pro­duction
is expanding about 7 percent. Larger imports also are contributing to supplies.
Consequently, total stocks of food at the end of December likely will be about one-tenth
larger in 1967 than in 1966, and slightly above the 1965 level.
Total use of farm food is expected to turn up again in 1968. Most of the increase
is expected to be for crop foods, reflecting in part the large carryover from 1967 crops.
Exports are expected to expand and military food takings again may be larger, leaving
civilian food use in 1968 not much different from the 1967 level.
4 FAMILY ECONOMICS REVIEW
Per Capita Food Consumption
Per capita food consumption is increasing about 11/2 percent in 1967, but little
change is expected in 1968. Consumption in 1967 is much larger than in 1966 for beef,
pork, poultry, eggs, citrus fruits, potatoes, and fresh vegetables. Per capita consump­tion
is not likely to be larger in 1968 for any of these products except chicken. Consump­tion
is lower in 1967 than in 1966 for dairy products, veal, lamb, deciduous fruits, and
melons. In 1968 veal and lamb consumption again is expected to decline.
Per capita consumption in 196 7 is totaling around 1, 434 pounds on a retail weight­equivalent
basis, 12 pounds more than in 1966. Consumption is averaging about 3, 180
calories per capita per day. The increase in consumption is resulting in a per capita
increase of 3 percent in vitamin A value and 5 percent in ascorbic acid. Part of the in­crease
in food consumption in 1967 is due to an increase in donation programs. The
USDA direct food distribution program alone is accounting for about 1 pound of the 12-
pound increase.
RETAIL FOOD PRICES: RET All FOOD PRICES:
SELECTED LIVESTOCK PRODUCTS SELECTED CROP PRODUCTS
~1950-------.-------.-------.-------, ~ OF 1950
160
140
120
100
1!.
80
1960 1965 1970 1950 1955 1960 1965 1970
NUl. Uti H7t · 47 t 10 ) ECONOMIC llfUAII:CH U II \l iC E L.,.U;:•; _L:c..:.;OI:;".:;':..':.":c:;;"_';'_:O;;_:A': O:;~:cC::U_'::T_U:;O;.I: ______..: c• ;_·..":;_c":...;.':;".: _·_"::..:"..;_':.:1_ :•:.<.:O.:;::_O;MM:;".: _.::."':.'.:.•::":.::";_:";:;'_"::':"::. .J
Fig. 1 Fig. 2
Consumption of livestock products in the first 3 quarters was 3 percent larger in
1967 than in 1966. Meat, poultry, and eggs each participated in the rise. Meat con­sumption
likely is dropping nearer to the year-earlier level in the fourth quarter. In
1968 it may average around the 1967 level. Broiler meat consumption likely will con­tinue
above 1967 levels throughout 1968, but turkey consumption likely will be lower.
Sharp price declines for eggs are resulting in a cut in the egg-laying flock, so per capita
egg consumption likely will be lower in the second half of 1968.
Milk production in 1967 is totaling about the same as in 1966, but consumption of
fluid milk and most other dairy products is continuing significantly lower. The drop is
a reaction to higher retail prices and a continuing decline in demand. Little further de­cline
is expected in consumption of dairy products in 1968. USDA donations of dairy
DECEMBER 1967 5
products were increased considerably in 196 7 when stocks of manufactured dairy prod­ucts
accumulated at support price levels.
Per capita consumption of fruits in 196 7 is well above that in each of the previous
4 years, due primarily to a much larger citrus crop. Most deciduous fruit crops were
down in 1967, and a smaller crop of citrus fruits is in prospect this winter. As a result,
supplies of fruit this winter are expected to be smaller. Higher prices are likely for
most items, both fresh and processed.
HOUSEHOLD USE OF CONVENIENCE FOODS
Gordon E .. Bivens, U.S. Department of Agriculture
This paper discusses changes between 1955 and 1965 in the quantities used and
amounts spent for 32 convenience foods. "Convenience foods" here refer to "foods which
have services added to the basic ingredients to reduce the amount of preparation required
in the home. "Y
Changes in Use of Individual Foods
The quantity of canned, condensed soups used went up 30percent during the 10-year
period, and dehydrated soups 100 percent. Both quantity and expenditure dropped for bis­cuit,
roll, and muffin mixes, but rose for bakery products other than bread. Ready-to­eat
cereals scored about a 30 percent increase in quantity used in spite of higher prices
reflected in the roughly 90 percent increase in expenditure. The quantity of instant coffee
used rose 125 percent, while expenditures for it went up only 33 percent, indicating a
price responsiveness for this product.
Some convenience foods made even larger percentage gains than those above--for
example, frozen potatoes, frozen and powdered fruit ades, and fresh commercial juices,
all of which tripled or quadrupled in use. However, these items were being consumed in
fairly small quantities in 1955 so even a small increase would appear large when ex­pressed
as a percent .
. !/ The convenience foods included in this analysis were: Canned and frozen fruits and
vegetables ; canned, frozen, and fresh fruit juice; canned vegetable juice; frozen, canned,
and dehydrated potatoes and sweetpotatoes; potato chips and sticks; ground beef; frank­furters
; other lunch meat; mixtures with and without meat; canned and condensed soups;
dry and dehydrated soups; pancake mixes; biscuit, roll, and muffin mixes; cake mixes;
bakery bread; other bakery products; ready-to-eat breakfast cereals; instant coffee;
frozen and powdered fruit ades and punches; canned and dry milk; frozen desserts; pudding
and pie fillings ; and icings.
6 FAMILY ECONOMICS REVIEW
Changes in Expenditures for 32 Convenience Foods
Changes in expenditures for convenience foods between 1955 and 1965 reflect changes
in both price and quantity bought. The average expenditure in a week in spring for the 32
convenience foods combined increased from $6.12 per household in 1955 to $8.13 in 1965
--or 33 percent (fig. 1). The expenditure per person increased from $1. 84 in 1955 to
$2.47 in 1965--or 34 percent.
During the 10-year period, farm families increased their expenditure per person
for convenience foods used in a week more than did urban families--61 and 27 percent,
respectively (fig. 2). However, the amount farm families spent for these foods was still
considerably less than what urban families spent ( $1. 98 and $2. 58 per person, respec­tively).
EXPENDITURES FOR CONVENIENCE FOODS
1 WEEK IN SPRING
Per
Household
Per
Penon
IHCLtiOUUCO.WVfHiflf(f 1'"0001.
Fig. 1
~1955
.1965
S8 .13
INCREASE IN SPENDING FOR CONVENIENCE FOODS
Per Person , 1955-65
61,;
36,;
Fig. 2
DECEMBER 1967
Families in the South increased their
spending for convenience foods 56 percent,
compared with· 35 percent in the Northeast,
24percent in the NorthCentralRegion, and
23 in the West (fig. 3). In all regions the
percentage change was larger in farm than
nonfarm areas.
Families with low incomes increased
their .expenditures for the 32 convenience
foods more than higher income families.
For those in the lowest one-third of the in­come
scale the increase was about 47per­cent,
compared with a 28 percent increase
for families in the highest one-t}lird of the
scale. This increase for low-income fami­lies
may be partly because single-person
INCREASE IN SPENDING FOR CONVENIENCE FOODS
Per Person by Region , 1955-65
IHCUIOUUCOiflfflll/lll(fiOOOS. /HU:II'IHSI"It/01 (;.
Fig. 3
7
households--many of whom have low incomes--were included in the income groupings in
1965 but not in 1955.
Expenditures for Convenience Foods as a Percentage of the Food Budget
Convenience foods are not just frills, but a substantial and growing part of the food
budget.. Expenditures for the 32 convenience foods studied averaged about 27 percent of
the total amount spent for food used at home in a week in U.S. households in 1955, and
30 percent in 1965.
In urban households convenience foods took 26 percent of the total amount spent for
a week's food in 1955 and30percent in 1965;in rural nonfarmhouseholds they took 29and
32 percent, respectively. In farm households the expenditure for convenience foods was
33 and 37 percent of the week's total food bill in the respective years. This does not
mean that farmers used more convenience foods than others. But because they raise
about 30percent of their food supply, they spend a smaller amount for food, and conveni­ence
items are a larger proportion of this expenditure.
Convenience Foods in 1965
Spending for convenience foods in 1965 was highly correlated with income--that is,
the higher the income the larger the amount spent per person for these foods. However,
income affected spending for convenience foods less in 1965 than in 1955.
The use of convenience foods is becoming more alike among U. S. regions and
urbanizations (urban, rural nonfarm, and farm areas), as is spending for food as a
whole. Somewhat of a "homogenization'.' of food patterns seems to be taking place.
PROTECTING CONSUMERS THROUGH RESEARCH
Robert J. Anderson, U.S. Department of Agriculture
USDA has come a long way in consumer protection. We have learned a great deal.
But we find that the more we learn, the more we need to know.
Salmonella is a case in point. This organism is a common cause of food poisoning.
Poultry products are especially vulnerable to contamination, so we have devoted much
effort to helping the poultry industry overcome the problem. We developed simplified
laboratory tests for detecting salmonella, and methods for pasteurizing dried eggs, egg
whites, and whole eggs. In 1966 we made pasteurization mandatory for all egg products
moving in interstate commerce. Poultry processors have sought to reduce contamination
by using filtered air in their plants and minimizing exposure of products to plant workers.
8 FAMILY ECONOMICS REVIEW
These efforts have helped hold down salmonella contamination, but we are going to
have to expand our attack. Salmonella organisms are carried by man, animals, birds,
even insects. It is doubtful that they can ever be removed from the environment entirely.
Our best bet probably is to establish a salmonella-free pathway from farm to market to
consumer--to find ways of breaking the cycle by which salmonella organisms perpetuate
themselves.
Studies conducted in cooperation with industry confirmed that animal feeds, espe­cially
those containing animal byproducts, often are contaminated with salmonella. Ani­mals
carrying salmonella organisms in their intestines are slaughtered and their intes­tines
are sent to a rendering plant to be added to feed. If the rendered products are not
completely free of salmonella, the disease chain goes on. USDA is currently inspecting
rendering plants in various States. Soon it will issue standards recommending sanitary
procedures for feeds and feed ingredients, and requiring product testing in rendering and
feed-processing plants.
USDA and the Department of Health, Education, and Welfare have asked the National
Academy of Sciences-National Research Council to conduct a thorough study of salmonella
to determine its economic significance in terms of animal and human health, the principal
carriers, and new methods of preventing contamination.
Another problem causing increasing concern is avian leukosis. Leukosis infections
in poultry flocks have been rising steadily. In past months USDA inspectors in the big
poultry-producing regions of the Southeast have had to condemn about 3 percent of the
birds sent to market--about one-fourth of these for avian leukosis. Although avi~ leu­kosis
is a form of cancer, it is not one that can be transmitted to man. Federal regula­tions
require that birds infected with any disease be kept off the market, and condemna­tions
are being made on that basis--not because of the nature of the disease.
Other USDA research affecting consumers is the work on mycotoxins, which are
poisons produced by molds. No one paid much attention to them until 6 years ago, when
moldy peanut meal fed to turkeys in England killed about 100, 000 of the birds. We now
know that mycotoxins are poisonous if taken in large amounts and cause cancer tumors
if taken over a period of time even in small amounts. Mycotoxins have been detected on
many crops, but most often on peanuts. USDA, the Food and Drug Administration, and
th.e peanut industry have worked together to develop methods for detecting toxic peanuts
and keeping them from use as food or feed.
A manmade health hazard we've all heard about is pesticides. The immediate
problems of pesticide use are now generally understood but less is known about the long­term
effects. We are working to fill that gap in knowledge. There can be little question
that pesticides are here to stay. Therefore USDA's goal must be absolute protection
from pesticide contamination and total elimination of pesticide accidents.
One way USDA helps insure pesticide safety is by registration of pesticides. All
pesticides sold across State lines must be registered with USDA. Manufacturers must
prove the safety and worth of a material before it is ever marketed.
9
DECEMBER 1967
USDA also oversees labeling of pesticide products. Recent regulations require that
warning and caution statements be prominently placed on the front panel of the labels,
printed in specified type sizes, and written in language that is easy to understand. The
new regulations also require the USDA registration number on labels, so the buyer knows
he's getting a federally regulated product. These labeling regulations became effective
1 year ago. Since then, all labels requiring USDA sanction have been reviewed.
USDA took the lead in the creation of what is now the Federal Committee on Pest
Control. This committee reviews the pest-control plans of all Federal agencies, includ­ing
USDA's cooperative programs. One result of cooperative Federal efforts is more
complete reporting and investigation of accidents involving pesticides. The resulting
data help identify weaknesses in research and educational programs. At USDA's request,
also, the National Academy of Sciences-National Research Council has agreed to review
the use of and need for persistent pesticides.
Another problem is the accumulation of animal wastes around large feedlots and
dairy operations. These wastes give off offensive odors, cause stream pollution, and
may be reaching ground water supplies. USDA scientists are studying the problem and
hope to find answers that will satisfy both the feedlot operator and his neighbors.
USDA's relationships with other Government agencies on projects involving human
health have always been rather informal. Now we have proposed that USDA, the Depart­ment
of the Interior, and the Department of Health, Education, and Welfare establish a
Federal Committee on Food Safety, with joint responsibility for the wholesomeness of
the Nation's food. If this committee is approved, we hope it will review and make rec­ommendations
on present problems, anticipate future problems, speed up exchange of in­formation
between the Departments, and encourage exchange among international, Fed­eral,
and State agencies. The committee could become a clearinghouse for such prob­lems
as bacterial contamination, chemical residues in foods, and environmental pollution
of food and feed.
EXPENDITURES FOR FOOD AWAY FROM HOlVIE
Corinne LeBovit, U.S. Department of Agriculture
Of the approximately $30 billion spent in a year for food and beverages served away
from home, about six-tenths are spent in such places as restaurants, lunchrooms, cafe­terias
, and refreshment stands; two-tenths (in retail prices) in institutions such as hos­pitals,
colleges, homes for the aged or children, and camps; one-tenth in hotels and
motels; and one-tenth in places like drug and department stores, delicatessens, movies,
private clubs, and factories.
10 FAMILY ECO.NOMICS REVIEW
Trends in Expense for Eating Out
The total consumer bill for food bought and eaten away from home (including alco­holic
beverages) has risen rapidly. Expenditure per person increased steadily since the
early 1950's, accelerating after 1963. When these expenditures are expressed in con­stant
dollars, however, the per person amount decreased up to 1961 but increased stead­ily
after 1963. The 1966 average was slightly above the earlier peak of 1953.
Prices for eating out rose faster than expenditures up to the mid-1960's. Prices
of meals in public eating places are greatly affected by nonfood costs such as wages and
salaries, rents and other property costs, taxes, maintenance, and equipment.
The proportion of total consumer expenditure for food and beverages that went for
meals and other food and beverages eaten out, according to Department of Commerce
data, was about 20 percent over most of the period since 1953--though it has increased
some since 1964. Apparently families adjusted to higher prices by keeping fairly con­stant
the percentage of the food dollar spent for eating out.
According to two national food consumption surveys of the U.S. Department of
Agriculture, families spent an average of about $6 a week in the spring of 1965 and $5 a
week in the spring of 1955 on food and beverages bought and eaten away from home. This
would be $97 per person for the year 1965 and $74 for 1955, assuming spending in other
seasons was the same as in spring. (Eating out was probably somewhat understated in
the surveys because ( 1) households in which no one had eaten at least 10 meals at home
during the week were not interviewed; (2) less eating out may have been done in spring
when the data were collected than in other seasons; and (3) the person interviewed may
have underreported how much other family members spent.)
Mostof theincreasedspending for food away from home between 1955 and 1965 was
for meals, little of it for snacks. The proportion of families reporting snacks bought and
eaten away from home decreased from 6 out of 10 in 1955 to about 5 out of 10 in 1965.
However, consumption of snack-type foods at home increased. Households reported con­siderably
higher home consumption in 1965 of soft drinks, punches and ades, potato
chips, crackers, cookies, doughnuts, ice cream, candy, and peanut butter. The move
to the suburbs, increased proportion of children in the population, and popularity of TV
may have led to a shift from snacking at the candy store and lunch counter to snacking at
home.
Differences Among Population Groups
Urban-rural differences. --Urban families spent a larger amount and a higher per­centage
of their food dollar for meals away from home than did farm families, in both
1965 and 1955 (see fig.). However , farm families more than doubled their expenditure
for meals out during this period, while city-dwellers increased it by one-fourth. Thus,
farm family spending for food away from home was much more like that of urban fami-lies
in 1965 than in 1955.
DECEMBER 1967
11
Regional differences. --Spending for
meals away from home in 1965 was high­est
in the Northeast and West, lowest in
the South. About the same ·proportion of
households in each of the regions bought
such meals in a week (55 to 60 percent).
Therefore, the higher expenditures in .
Northeast and West meant that these fami­lies
either bought more meals or more ex­pensive
meals.
Southern families increased their
spending for meals eaten out much more
than those in other regions between 1955
and 1965. Their spending. rose about 75
COST OF MEALS EATEN OUT,
IY URIANIZATION, 1955 AND 1965
Per Household per Week, Spring
$5.10 ·-- lULU MOMFAIM
U .S7
~1965 ~1955
$UI
percent, compared with 30percent in the Northeast and West and 20 percent in the North
Central Region.
Income differences. --High-income families not only spent more than low.:..income
families for food away from home, but also allotted a larger proportion of their food
dollar to it. Eating out took 26 percent of the food and beverage dollar of those with
incomes over $10, 000, compared with 9 percent for those with less than $3, 000. High­income
families spent about 10 times as much for meals eaten out but less than 5 times
as much for snacks as did low-income families.
Meals Without Direct Expense
About one-third of U.S. families had some free meals during the survey week in
spring 1965. Most of these meals were received as guests in other people's homes, some
as guests at public eating places. They also included meals paid from expense accounts
and those received free at work or school. The proportion of families reporting free
meals was highest in rural nonfarm areas, lowest on farms. Somewhat more one-person
than larger households reported receiving free meals.
A STATE PROGRAM OF CONSUMER PROTECTION
Faith Prior, University of Vermont
In 1963 it occurred to me that the most useful thing I could do in my job was to
bring myself and the people for whom I had an educational responsibility up to date in
consumer awareness, and to establish some mechanism for getting information to the
public. It was not easy to sell a traditionally production-oriented agency the idea of a
12 FAMILY ECONOMICS REVIEW
consumer-oriented function. However,. we were fortunate in receiving the University's
support . . The administration was willing to try the project on an experimental basis and
chart the rest of the course from there.
The original proposal was for the establishmentof a Consumer Information Clear­inghouse.
The proposal listed the objectives of the clearinghouse thus:
1. To publish a monthly newsletter for the Extension staff and a bimonthly publi­cation
for the general public.
2. To serve as a clearinghouse for the referral of consumer problems to other
agencies, or to suggest suitable lines of action in problem situations.
3. To sponsor and arrange a public statewide annual conference on consumer
information.
4. To represent the consumer point of view to persons, groups, or agencies; to
represent the production and marketing point of view to consumers.
We did build in a few safeguards. We established a clearinghouse advisory com­mittee
with representatives from medicine, commerce and economics, agriculture, mar­keting,
political science, and the State Food Safety Committee. We arranged that all
copy for the newsletter for the public, DOLLARS AND DECISIONS, should be cleared by
' the University's attorney before publication.
We have done each of the things we set out to do. Our staff newsletter is called
CONSUMER CONFIDENTIAL. DOLLARS AND DECISIONS goes to a mailing list of about
12, 000 bimonthly. We have just held our fourth annual Consumer Day at the University.
Last year two counties combined to hold a regional Consumer Day. A second pair of
counties joined them this year and it appears that this trend will continue. We have a
weekly news column that goes to every paper in the State and to certain other publica­tions,
a weekly radio tape, and a monthly TV program. If time permitted, we would go
to a weekly TV show, as the response warrants it. I have addressed more than 12,000
people-in-audiences, and the clearinghouse has distributed over 255, 000 publications in
the past 4 years.
We have answered literally thousands of questions about consumer problems. Some
were questions of fact or opinion; some could be referred to a specific agency. For
some, there was no answer except, "I'm sorry, there doesn't seem to be anything that
can be done, " or "perhaps a private attorney could suggest something."
Being in charge of conference programs makes it possible to work as a catalyst for
bringing into contact points of view that are--or should be--synergistic. For example,
Vermont had no compulsory meat inspection laws. The forum that Consumers Day af­forded
helped make it possible to move through the legislature a bill remedying this situ­ation.
It was also at Consumers Day that the Governor was given a first-hand hearing of
the public voice .speaking out on the lack of other statutory protection~ in the c?nsumer
field. As a result, the Governor's office asked the Consumer InformatiOn Clearmghouse
to draw up legislation which would provide remedies suitable for Vermont.
DECEMBER 1967
13
With the approval and cooperation of the Director of Extension this new venture was
undertaken, aligning consumer laws that had been enacted in other States with the prob­lems
observed in ours, and bringing the various elements within the framework of the
Federal Trade Commission Act. The bill as finally drafted was broad in concept, mak­ing
all "unfair methods of competition in commerce and unfair or deceptive acts or prac­tices
in commerce" unlawful. In addition, certain specific practices were cited and rem­edies
provided. For example, the act provides that the buyer may annul an installment
sales contract by certified mail postmarked the first business day after the transaction,
if he has not received a substantial portion of the goods or services. Whatever amount
the buyer had paid on the purchase must be refunded, and any papers indicating an indebt­edness
must be returned.
The act also provides that the holder in due course of evidence of indebtedness in
connection with a retail sales transaction should be "subject to all defenses of the buyer
which would be available to the buyer in an action on a simple contract. " This was in­cluded
as a protection to buyers--especially buyers of home improvements who found
themselves complaining to the contractor that the aluminum siding job had not been prop­erly
completed, only to be told that the contractor was no longer interested because the
note had been sold to a bank. The bank, when contacted, would reply that they were in
the money business, not the siding business, and that payment was due as scheduled.
Under the new law, the bank would be responsible for all terms of the original contract.
The act also made bait advertising unlawful. It gave the attorney general authority
to restrain prohibited acts, gave the details of such prohibitions, outlined the extent of
civil investigation authorized and penalties for falsification of evidence, indicated penal­ties
for noncompliance with injunctions, and provided for cooperation with State's attor­neys.
The Consumer Information Clearinghouse was designated to "carry out a consumer
education program designed to complement the investigative and enforcement duties of
the attorney general provided for in this act. "
The two bills were first on the desks of legislators in January 1967. All of the
news media were used to make the public aware of the intent and content of the bills and
the kinds of practices the law was intended to correct. We presented real cases as ef­fectively
as possible, also the bills themselves--what each section said and what it meant.
I appeared many times before legislative committees and the committee of the whole, on
the invitation of the chairmen or of commissioners whose departments would be involved
in administering legislation. Testimony was fully reported in press, radio, and TV.
On April 17, 1967, the Fair Business Practices Act was passed unanimously and
signed into law. Within 10 days the attorney general had proceeded against the first com­pany
to have charges brought under the new law.
On July 1, 1967, a Consumer Protection Office was opened in Burlington under the
direction of an assistant attorney general. We have worked in the close cooperation spe­cified
under the new law. Taking July's settled cases as a base, August's settled cases
showed an increase of 236 percent and September's almost 300 percent. Our phone calls
have dropped about 75 percent during that period.
14 FAMILY ECONOMICS REVIEW
We have used all of the media to inform the public of the existence of the potential
services of the new office. Appearances in the media have led to many requests to speak
to groups. At some of these the assistant attorney general and I have made joint appear­ances,
some we have parcelled out between us. People~ interested.
We continue to use our Consumer Day programs to uncover problems that may need
official attention. During last month's forums a few such areas were: gaps in the meat
inspection law, referral selling, speedometer rollbacks, telephone soliciting, classified
directory listings, auto transmissions, backdating of contracts to avoid "next business
day" cancellations.
County agents uncover problems, refer them to the clearinghouse, and they are
passed on to the Consumer Protection Office. Information is also channeled outward
through the county offices. Some complaints goto the Federal Trade Commission. FTC
attorneys have appeared at every Consumer Day program, and a two-way communication
seems to be functioning effectively. Similar relationships exist with the Food and Drug
Administration, Post Office Department, Federal Housing, the President's Committee
on the Consumer Interest, and Association of Better Business Bureaus; such State de­partments
as Banking and Insurance, Agriculture, Health, Welfare, Taxes, Recreation;
and local Chambers of Commerce, Merchants' Bureaus, and Credit Bureaus.
TRENDS IN RET AIL PRICES
James C. Daugherty, Bureau of Labor Statistics
The slowdownin the economyduringlate 1966 and early 1967appears tohave ended.
By most indications we are experiencing a resumption of the expansion that began in 1961.
This is being accompanied by price increases at rates higher than most authorities con­sider
"acceptable" or "moderate. " Many of us who work with these figures every day
fondly--and not altogether in jest--look back upon the early 1960's, when prices were
rising less than 1.5 percent a year, as the "good old days." Certainly there is no pros­pect
that that experience will be repeated any time soon. On the other hand, there is no
immediate danger that we will have the kind of price inflation we had in the early 1940's
or in 1951 after the outbreak of the Korean war.
Prices in 1966.--During most of 1966 the economy operated at the highest capacity
in more than a decade, and rising demand made prices rise considerably (see fig.).
Interest rates on home mortgages rose to record levels. Rates for conventional first
mortgages on new homes rose from 5. 8 to nearly 6. 5 percent. The Bureau of Labor
Statistics (BLS) index for mortgage interest rates rose 12.5 percent during 1966. This
item accounted for more than one-tenth of the 3.3 percent rise in the all-items Consumer
Price Index (CPI). Food prices increased 3.8 percent in 1966. Prices of consumer dur­ables,
which had declined in 1965 chiefly as a result of cuts in Federal excise taxes, rose
15
DECEMBER 1967
fractionally. Apparel and footwear prices rose at a faster rate than before, at first be­cause
of increased civilian and military demand and later as a reflection of increasing
labor costs. Prices of gasoline and cigarettes rose due to "conventional" influences and
to rising State and local excise taxes.
Service costs increased an average of nearly 5 percent in 1966, and accounted for
nearly one-half of the year's change in the CPl. Medical care services jumped about
8 percent, led by an increase of about 16 percent in hospital room rates and 8 percent
in physicians' fees. The rise in hospital rates reflected the rise in demand forhospital
:Jare and wage increases for nurses, technicians, and custodial and supporting personnel.
Other service costs also rose sharply in 1966 and appear to have continued upward to the
present. Among those increasing most are home maintenance and repairs, domestic
services, laundry and drycleaning, barber and beauty shop services, and movie admis­sions.
This can generally be attributed to the tight labor situation, which enabled ser­vice
workers to gain substantial wage increases.
Prices in 1967 and 1968.--The rise in consumer prices slowed down somewhat be­tween
November 1966 and February 1967, gaining 0. 3 percent for the 4-month period.
The short-lived stability was due primarily to decreases in food prices, which dropped
nearly 2 percent from their mid-1966 high levels.
Prices resumed their uptrend in April 1967. During the 6 months ending in Sep­tember
they rose 1.8 percent. The September CPI was 2.6 percent above thatof Septem­ber
1966. Higher service costs accounted for about two-fifths of the 6-month rise. Ap­parel
prices, which rose more than usual in September, gave a substantial push to the
CPl. Food prices advanced 1. 5 percent since March. Prices of consumer durables
moved up during most of 1967, led by advances for used cars and furniture. Appliance
prices also appear to be edging upward.
There seems little doubt that the economy is again moving ahead. The only ques­tion
is how strong the gain will be in the coming months. Signs point to a moderate
growth rather than a sharp upsurge.
Consumers have increased their rate of spending during the past several months.
However, there are no present indications that they will go on a buying spree anytime
soon. While there is not much likelihood of a "demand-pull," chances are that a "cost­push"
will be dominant in the price picture in the months ahead. Wage increases negoti­ated
during the first 6 months of 1967 averaged 5percent or more annually (over the life
of the contracts). The index of labor cost per unit of output in manufacturing is about
7 percent above its spring 1966 level. It is reasonable to expect that some of this in­crease
in wage costs will be reflected in retail prices.
In 1968 price increases of the four major components of the CPI will all exceed
those of 196 7. Consumer service costs should advance at a slightly higher rate in 1968
than in 1967 and continue to be the dominant factor in the rise in the all-items CPl.
Somewhat higher costs for mortgage interest, medical care, personal care, and house­hold
services will push these indexes higher.
16 FAMILY ECONOMICS REVIEW
Higher apparel prices are likely to come chiefly from increasing costs, although
consumer demand will remain high. During 1967 much of the rise in apparel prices has
come from widening retail margins. This trend will continue as operating costs in­crease.
Rising labor costs in apparel manufacturing will continue to push manufacturers'
prices up.
Prices of consumer durables are ex­pected
to advance considerably in 1968,
reflecting higher costs and gains in de­mand.
Retail prices of appliances, radios,
and TV sets are already responding to in­creases
in factory prices. Demand is ap­parently
strong enough to sustain retail
price increases for these items. Higher
costs at the factory and in distribution will
result in higher prices for furniture and
tires. New and used car prices will rise
at least as much as in 196 7.
,t•.1• I .,'l It 0 0
I) >I--
I
CONSUMER PRICE INDEXES: COMMODITIES AND SERVICES
·!seasonally Adjusted!
•t .•· '' ,.. •·•~ I - '1 "'\ ~ "' •• , ...
. .... ... ol-- . ' ~· v .... " ' ...
'
.. .. .. . ..
0 /
' It~ SEIIIICES ...... Vr~~ /.,..,.......... If- [/-"'
,oll-L --~-~~ ~v ~ 01~ 1/...(_~lll!S' :;..~ ,_...:::!-..
IONDUIIILIS LESS FOOD' ' I I L I
I)
"
"
II
II
10
10
1960 196\ 196' 1961 1964 196'1 \CJ66 \961 1968
UNti(Q SU I( '\ Olf'AAI MIN I 01 lABOR
1951 59
-
-
- 1969
100
140
1)0
115
120
115
110
105
100
It is expected that food prices will
rise at a somewhat faster pace in 1968
home will advance at least 5 percent.
than in 1967. Costs of food eaten away from
THE FEDERAL MEDICARE PROGRAM
. Dr. John Noble, Social Security Administration
Medicare has made a good start in its goal of financing high-quality medical care
for older citizens within the framework of the existing health care system. The claims­processing
operation has improved rapidly from the standpoint of both speed and effi­ciency,
as carriers, beneficiaries, and physicians have become more familiar with the
program. (Carriers include 33 Blue Shield Plans, 15 commercial insurance companies,
an independent insurer, and a State agency.)
Medicare has already served its beneficiaries--those 19 million Americans age 65
and over who are covered under the hospital insurance part and the 17.7 million who are
enrolled in the voluntary medical insurance part--to a substantial degree. During the
first year,. ending June .30, 1967, $2.5 billion was paid for hospital insurance benefits and
$669 million was paid for medical insurance benefits.
Hospital admissions for inpatient care numbered 5 million. When this figure is
adjusted for readmissions, we estimate that about 4 million received inpatient hospital
DECEMBER 1967
17
services the first year. Many who formerly would have been ward patients have a new
status--that of semiprivate patients who, if they wish, can have services performed by
physicians of their own choice. Many have gained a peace of mind which cannot be meas­ured,
in the knowledge that Il).edical expenses will not result in serious depletion of sav­ings
or require financial assistance from children.
For medical care, over 14 million bills were paid for services performed by phy­sicians,
independent laboratories, and other providers of benefits. Of these bills, over
90 percent were for physicians' services. For services provided by home health agen­cies,
Medicare received 228, 000 "start of care" notices--about 70 percent under the
medical insurance and 30 percent under the hospital insurance program. During the
year 450, 000 bills for home health services were paid. From January 1, 1967--when
the extended care benefit became effective--to June 30, there were 199, 000 admissions
to extended care facilities, and 330, 000 bills for extended care services were paid.
Home health care and extended care benefits are examples of ways in which Medi­care
is stimulating the growth of new concepts in health care. These services have ex­isted
in the past in some communities but have often been under-utilized. One reason
was that few private insurance programs included coverage for such benefits; another
was that neither type of service was fully recognized by the professional community. Yet
these services are often better suited than hospitals to the health care requirements of
patients at successive stages of illness. They can play a major role in relieving hospi­tals
of the burden of expanding staff and facilities to care for persons who do not need the
intensive, multifaceted care hospitals are designed and equipped to provide.
Hospital services to outpatients are another device for reli,eving pressure on in­patient
facilities, and 1. 2 million bills for outpatient services were paid during the first
year. This has been a difficult benefit to administer under the present law. Certain
legislative changes, we hope, will result in a simplified outpatient hospital benefit and a
more manageable claims process.
It can fairly be said that Medicare has already had a profound influence on the
health community. Most dramatic has been the certifying of facilities for participation
and what it has accomplished. To participate in the program, a hospital, extended care
facility, home health agency, or independent laboratory must meet conditions designed
to assure that it can render quality care, both in terms of its physical environment and
the adequacy and professional qualifications of its staff. The fact that the conditions
have been met by 6, 800 hospitals, about 4, 000 extended care facilities, 1, 800 home
health agencies, and 2, 400 laboratories is a notable achievement.
Until July 1, 1966, home health agencies in most communities furnished only visit­ing
nurses' services. One condition of their participation in the Medicare program is
that they must provide at least one additional health service beyond visiting nurses 1 care,
such as physiotherapy and home health aide services. All of the 1,800 participating home
health agencies--virtually all such agencies in the Nation--now provide at leastone addi­tional
service, and nearly two-thirds provide two or more additional services. Since
18 FAMILY ECONOMICS REVIEW
these services are not restricted to Medicare beneficiaries, home health care now has a
far higher capacity to meet health needs of citizens.
Medicare requires all participating institutions to establish a formal method of re­viewing
all long-stay institutional cases under the program--analyzing admission pat­terns,
lengths of stay, and modes of treatment. Utilization review is usually thought to
have one purpose--to assure that institutional care is not excessively used when other
levels of care are medically indicated. The educational potential of such data, main­tained
and used locally by the institution's own medical staff, deserves fully as much at­tention.
While marry hospitals had utilization review committees before, Medicare's pro­vision
that all must have such review made a significant change in the health care system.
Another important relation between Medicare and the health community is its reim­bursement
approach. Medicare is committed to paying "reasonable costs" for institu­tional
services and "reasonable charges" for physicians' services. The usual pattern in
the health insurance field is to base institutional reimbursement on a fixed fee schedule.
Medicare chose to reimburse at a level that would represent, as nearly as possible, the
actual costs and the "going rate" of health services. The consequence intended, of course,
is that our beneficiaries will receive quality care. If the effect is to inflate the price of
care without raising its quality, that would be a deplorable consequence. The financial
support Medicare reimbursements will give the health community on a long-term pre­dictable
basis will go far in encouraging their own long-range planning for improving
health care capacity. Medicare bases reimbursement for a physician's services on his
customary charges and prevailing charges within his area of practice. Thus physicians
will be assured of fair and equitable reimbursement for the many elderly patients who
were treated on a reduced-fee or no-fee basis in the past.
Some probable legislative changes that will affect Medicare are:
•
•
•
•
An optional method of paying physicians' bills will permit payment to
be made on the basis of an itemized but unreceipted bill.
Outpatient diagnostic services will be transferred from hospital to
medical insurance. Pathology and radiology services for hospital in­patients
will be exempt from the deductible and coinsurance provisions
of medical insurance.
Podiatrists 1 services--except routine foot care--will be covered .
Initial certification by physicians for hospital admissions and outpatient
hospital services will not be required, except for admissions to psy­chiatric
and tuberculosis institutions.
An additional 30 days of coverage will be allowed for inpatient hospital
service. There will be coinsurance for each of the additional days.
Medicare has demonstrated that the Government and the health community can work
together well, recognizing their purposes and goals are not really in conflict. The law's
DECEMBER 1967
19
administration has affirmed Medicare's basic reason for being: To provide a financing
mechanism for a range of services without changing the primacy of the physician's judg­ment
in medical matters. The health community is becoming reassured that Medicare
has no intention of encroaching on their professional relationships and has every inten­tion
of reimbursing them fairly and equitably. In the final analysis, this growing con­fidence
and rapport between Government and the health community may be one of Medi­care's
most fundamental achievements.
CONTINUING. CONSUMER PROTECTION AT THE
FOOD AND DRUG ADMINISTRATION
Kate Stahl, Federal Food and Drug Administration
Fair Packaging and Labeling Act. --Congress in 1966 gave the Food and Drug Ad­ministration
(FDA) new regulatory responsibilities for foods, drugs, and cosmetics under
the Fair Packaging and Labeling Act. FDA has since been writing separate regulations
for foods, for cosmetics, and for over-the-counter drugs and devices. Assessment of
their worth may have to wait until July 1968 when all food packages must comply with the
regulations unless granted extensions.
The Fair Packaging and Labeling Act requires that the net quantity of contents be
separately and accurately stated at a uniform location on the principal display panel (that
part of the label most likely to be shown or examined under customary conditions of dis­play
for retail sale). FDA regulations define the uniform location as the lower 30 per­cent
of the label panel. The contents statement must be in boldface type in lines gener­ally
parallel to the base of the package; separated from other printed information; indis­tinct
contrast to its background; and in a type size determined by the area of the panel.
Regulations were established for five minimum type sizes:
For an area 5 square inches or less ----------------- 1/16 inch in height
Over 5 square inches but not more than 25 ----------- 1/8 inch in height
Over 25 square inches but not more than 100 --------- 3/16 inch in height
Over 100 square inches but not more than 400 -------- 1/4 inch in height
Over 400 square inches ---------------------------- 1/2 inch in height
Quantity is given in fluid measure if the food is a liquid and in dry weight if it is a
solid or a mixture of solid and liquid. The declaration must state accurately the quan­tity
of food in the package, not including packaging material. However, the propellant in
a food for use under pressure (for example, whipped cream) may be included. The reg­ulations
give the temperatures at which frozen foods, refrigerated foods, and other foods
are to be measured.
20 FAMILY ECONOMICS REVIEW
The net contents of packages containing 1 pound but less than 4 must be declared in
total ounces followed by pounds and ounces or pounds and common or decimal fractions
of a pound. Packages with liquid contents of 1 pint but less than 1 gallon must also carry
a dual declaration. Examples are--
Net weight 24 ounces (1 lb. 8 oz.) or
Net weight 24 ounces ( 1 1/2 lbs.) or
Net weight 24 ounces ( 1. 5 lbs.)
Net contents 56 ~1. oz. ( 1 qt. 1 1/2 pts.) or
Net contents 56 fl. oz. (1 qt. 1 pt. 8 fl. oz.)
A label that says anything about servings must also say how much is in each serv­ing.
FDA regulations specify that the quantity of each serving must be shown in the same
size type immediately next to the serving statement. For example: 2 servings .... 2 oz.
each.
The common or usual name of the product must appear as a principal feature on
the display panel, generally parallel to the base of the panel. If the product could be
offered in more than one form--for example, sliced or whole--the form in the package
must be stated or shown by illustration, or it may be visible through the package.
The ingredients must be listed by their usual or common name on a single panel of
the label in decreasing order of predominance. A statement of the proportion of a par­ticular
expensive ingredient significant to consumers making value comparisons may be
required. The corporate name and the address of the manufacturer, packer, or distrib­utor
must be given. The ZIP code number will be required on any new labels designed
in the future.
FDA is now reviewing the comments of the drug, device, and cosmetic industries
on its proposed regulations for them. Proposals for packaging and labeling cosmetics
considered the fact that many cosmetics are sold in small, decorative packages. Final
regulations will make provision for these and at the same time provide the information
consumers need to make value judgments.
Drug Abuse Control Amendments. --Another area of consumer protection under
FDA is the result of concern over the widespread abuse of dangerous drugs--depressants,
stimulants, and hallucinogens. The Drug Abuse Control Amendments were passed in
1965 and became effective as of February 1966. FDA's Bureau of Drug Abuse Control
has 9 field offices. Some 300 trained agents are empowered to seize illegal supplies of
the controlled drugs, serve warrants, and arrest persons illegally making or distribut­ing
dangerous drugs. The law requires legal handlers of such drugs to keep records of
supplies and sales. No prescription more than 6 months old for controlled drugs can be
filled, nor can it be refilled more than five times. The law provides criminal penalties
for those engaged in illegal drug traffic but not for users.
Child Protection Act.--The Child Protection Act of 1966 amended the Federal haz­ardous
Substances Labeling Act of 1960. The new law includes but is not restricted to
labeling. It covers household-sized products of potentially dangerous substances, such
21
DECEMBER 1967
as laundry supplies, drain cleaners, bleaches, and paint thinners; and many do-it-your­self
products such as chemicals for photo labs, antifreeze, and fuels. Household-size
containers of these substances must carry a conspicuous label to warn of the potential
danger and to provide safety information.
If the product is highly toxic, corrosive, or flammable, the word "DANGER" must
appear on the label. If it is so toxic a small amount would cause death, it must have both
DANGER and POISON conspicuously on the label. For some, the skull and crossbones
symbol is also required. All other products covered by the Hazardous Substances Act
must display the word W ~NG or CAUTION. The hazard has to be described: e. g.,
FLAMMABLE, VAPOR HARMFUL, CAN BE ABSORBED THROUGH THE SKIN, CAUSES
BURNS. The label must list the hazardous ingredients and tell what to do or not to do in
case of injury. In addition to first aid directions when necessary, the label will say:
CALL A PHYSICIAN IMMEDIATELY. It must also warn: KEEP OUT OF THE REACH
OF CHILDREN. The name and address of the manufacturer, packer, or distributor is
required so antidote information can be obtained in an emergency.
FDA can recall, ban, or seize items considered too hazardous for common use.
SOME NEW USDA PUBliCATIONS
(Please give your ZIP code in your return address when you order these.)
Single free copies of the following are available from the Consumer and Food Economics
Research Division, U.S. Department of Agriculture, Federal Center Building, Hyatts­ville,
Maryland 20782:
FOOD CONSUMPTION OF HOUSEHOLDS IN THE UNITED STATES, SPRING
1965--A Preliminary Report. ARS 62-16.
NUTRITIONAL REVIEW (Reprinted from National Food Situation, November
1967). CFE (Adm. )-299-2.
Single free copies of the following are available from the Office of Information, U.S.
Department of Agriculture, Washington, D.C. 20250:
MILK IN FAMILY MEALS: A Guide for Consumers. HG No. 127.
LAMB IN FAMILY MEALS: A Guide for Consumers. HG No. 124.
SANITATION IN HOME LAUNDERING. HG No. 97. Revised 1967.
HOW TO BUY FRESH FRUITS. HG No. 141.
HOW TO BUY CHEDDAR CHEESE. HG No. 128.
The following are for sale by the Superintendent of Documents, U. S. Government Print­ing
Office, Washington, D.C. 20402, at the prices given:
22
OUTDOORS USA--The Yearbook of Agriculture 1967. $2. 75.
SCIENCE AND CONSUMERS: The Story of How Agricultural Research Serves
You. AIB No. 322. 25 cents.
HANDBOOK OF AGRICULTURAL CHARTS, 1967. AH No. 348. 45 cents.
FAMILY ECONOMICS REVIEW
CONSlMER PRICES
Consumer Price Index for Urban Wage Earners and Clerical Workers
(including single workers)
(1957-59 = 100)
Group
All items ----------------------------­Food
----------------~---------------
Food at home
Food away from home ---------------
Housing ----------------------------­Shelter
---------------------------
Rent
Homeownership ------------------­Fuel
and utilities ---------------­Fuel
oil and coal --------------­Gas
and electricity ------------­Household
furnishings and operation
Apparel and upkeep -----------------­Men's
and boys' ------------------­Women's
and girls' ----------------
Footwear --------------------------
Transportation ----------------------
Private ---------------------------
Public ----------------------------
Health and recreation --------------­Medical
care ---------------------­Personal
care --------------------­Reading
and recreation -----------­Other
goods and services ----------
Oct.
1966
114.5
115.6
113.8
125.2
112.2
115.5
111.0
117.4
108.1
108.3
108.0
106.1
111.5
111.5
107.5
122.2
114.3
112.3
129.6
120.4
130.4
113.3
118.0
115.9
Aug.
1967
116.9
116.6
113.9
130.3
114.7
118.4
112.6
120.8
109.1
111.7
108.5
108.3
113.8
114.5
108.8
126.0
116.4
114.4
132.8
124.2
137·5
116.1
120.0
118.8
Sept.
1967
117.1
115.9
112.9
130.8
115.0
118.7
112.8
121.1
109.4
112.3
108.9
108.8
115.1
115.5
111.1
126.4
116.8
114.8
133.0
124.9
138.5
116.4
120.5
119.7
Source: U.S. Department of Labor, Bureau of Labor Statistics.
Index of Prices Paid by Farmers for Family Living Items
(1957-59 = 100)
Nov. June July Aug. Sept. Oct.
Item 1966 1967 1967 1967 1967 1967
All items ----------------- 111 112 113 113 113 113
Food and tobacco -------- - 116 - - 116 -
Clothing ---------------- - 122 - - 124 -
Household operation ----- - 112 - - 113 -
Household furnishings --- - 98 - - 99 -
Building materials, house - 106 - - 108 -
Autos and auto supplies - 104 108 - - 108 110
Oct.
1967
117.5
115.7
112.6
131.4
115.3
119.0
113.0
121.5
109.4
112.5
108.9
109.1
116.0
116.1
112.7
127.1
117.7
115.7
133.0
125.5
139.0
116.5
121.4
120.3
Nov.
1967
114
-
--
--
110
Source: u.s. Department of Agriculture, Statistical Reporting Service.
DECEMBER 1967 23
COST OF FOOD AT HOME
Cost of food at home estimated for food plans at three
cost levels, September 1967, U.S. average ~
Sex -age groups y
FAMILIES
Family of 2:
20 to 35 years 3/----
55 to 75 years 2/----
Family of 4:
Preschool children 4/
School children L/-~-
INDIVIDUALS 6/
Children, under 1 year
1 to 3 years --- ---- -
3 to 6 years --------
6 to 9 y ears --------
Girls , 9 to 12 years --
12 to 15 years ------
15 to 20 years -----­Boys
, 9 to 12 years ---
12 to 15 years ------
15 to 20 years ------
Women, 20 to 35 years -
35 to 55 years ------
55 to 75 years ------
75 years and over --­Pregnant
-----------­Nursing
-------------
Men, 20 to 35 years ---
35 to 55 years ~-----
55 to 75 years ------
75 years and over ---
I
Cost f or 1 week
Low-costl Mode rate~ ~ Liberal
plan cost plan ·plan
Dollars
15.50
12.90
22.70
26.10
3.10
4.00
4.60
5 . 50
6 .30
7.00
7 .30
6.50
7 -50
8.80
6 .60
6 .30
5.40
4.90
7 .90
9 .10
7 .50
6.90
6 .30
5-90
Dollars
20.60
17.40
30.00
34.80
4.10
5 .10
6.20
7 .40
8 . 50
9.40
9.50
8 .70
10 .30
11.60
8 .70
8 .40
7.30
6.50
10 .20
11 .70
10 .00
9 .30
8 .50
8 .20
Dollars
24 .00
19.80
34.80
4o.6o
4.30
5 -90
7 .10
8 .80
9.50
10.90
10.80
10.00
11.70
13 .30
10.00
9 .70
8 .30
7.60
'' l
I I !
I
11.50
13.00 i
11.80 !
10.80 !
9.70 !
9 .40 j
Cost for 1 month
Low -cost
plan
Dollars
66 .90
55.60
98 .00
112.70
13.60
17.10
20 .00
2 3 . 90
27.50
30.10
31.50
28 .00
32.30
37.90
28 . 50
27 .40
23.40
21.30
34.10
39.20
32.30
30.10
27.20
25 .40
Moderate -lLiberal
cost plan plan
Dollars
89 .30
75-50
130.20
150.80
17.60 .
22.30
26 .80
32 .10
36.90
40.70
41 .30
37.60
44.50
50.40
37.90
36.50
31.70
28 .20
44.20
50.80
43 .30
40.30
36.90
35.60
Dollars
103.90
85.90
150.60
175.80
18.80
25.50
30.70
38 .30
41.20
47.10
46.80
43.10
50 .50
57.60
43.30
41.80
36.00
32 .90
49 .70
56.30
51.10
46.70
42.10
4o.6o
1/ Estimates computed from q,uantities in food plans published in FAMILY ECO­NO~
CS REVIEW, October 1964 . Costs of the plans were first estimated by using
average price per pound of each food group paid by nonfarm survey families at
3 income levels in 1955. These prices were adjusted to current levels by use
of Retail Food Prices by Cities , released by the Bureau of Labor Statistics.
2/ Persons of the first age listed up to but not including the second age .
~ Ten percent added for family size adjustment. For derivation of factors
for adjustment, see Family Food Plans and Food Costs, USDA, HERR No . 20 .
~ Man and woman, 20 to 35 years; children 1 to 3 and 3 to 6 years .
5/ Man and woman, 20 to 35 years; child 6 to 9, and boy 9 to 12 years . S/ Costs given for persons in families of 4. For other size families , adjust
thus : 1-person, add 20 percent; 2-person, add 10 percent; 3-person, add 5 per­cent;
5-person, subtract 5 percent; 6-or-more person, subtract 10 percent .
24 FAMILY ECONOMICS REVIEW
» U.S. CDVilUUENT PIU!ITING OFHC!z tl967 JOl-75~ (ARS-117>,