Monday, July 15, 2024
With higher rates of inflation, you may find that common purchases are taking up a larger percentage of your budget. One cost that may have creeped up is your grocery bill. According to the U.S. Bureau of Labor Statistics, over the last year, the consumer price index for food has increased 2.2% as costs are still on the rise.
While everyone is experiencing an increase in prices, some states provide more affordable options than others. To discover which states have the most affordable groceries, Rocket Loans used the 2023 Annual Average Cost of Living Index (COLI) from the Council for Community and Economic Research (C2ER).
On a country-wide level, our review found that the states that fall below the national average cost of living are often located in the South or the Midwest. The states with the most affordable groceries, listed below, are nearly split on whether they also have a sales tax – which can add to the affordability. Alabama, Arkansas, Oklahoma and Missouri have a sales tax on groceries, while North Dakota, Louisiana, Nebraska, Texas, New Mexico and Iowa don't.
To calculate the states with the least costly grocery bills, Rocket Loans referred to the grocery index within the COLI as a key statistic. The baseline is set at 100, and states lower than the national average are scored under 100 while states higher than average are above 100.
The grocery index is estimated based on the price of grocery products, which includes non-food items that are sold in grocery stores.
Listed below are the 10 states with the lowest grocery indexes. Once ranked, Rocket Loans also reviewed the average cost of individual grocery items and calculated the average grocery bill for most common food items only.
North Dakota has the lowest grocery index in the country at 94.2, which is 15.8% below the national average. This state has the lowest average costs for many basic foods including milk, orange juice, sugar and frozen meals.
Oklahoma's grocery index may be slightly higher at 94.4, but it does have the lowest cost of living out of all 50 states at 86.2, which is 13.8% lower than the national average. So, residents save on many common costs, such as transportation, housing and other everyday expenses.
Louisiana has a grocery index of 94.9. If you're someone who needs a caffeine fix, it also has the cheapest coffee in the country. If you live in metro areas like Houma-Thibodaux or Monroe, the grocery index can be 94.0 or lower, providing more affordable groceries in certain cities.
Arkansas has the fourth lowest grocery index at 95.2 and cost of living at 89.2 for the states listed. Along with having lower costs, the state has the Arkansas Hunger Relief Alliance, which provides Arkansans in low-income families access to groceries and resources for healthy food choices.
Missouri is the second most affordable Midwest state, behind North Dakota. The state has lower prices for basics such as bread, which can be bought for $3.52 on average – the lowest price among all 50 states. The state also provides aid to those who need it. One food assistance program unique to this state is Feeding Missouri, which is a coalition of the six Missouri Food Banks that can help cut costs for low-income families.
Nebraska has a slightly higher grocery index at 95.8, but a lower cost of living at 91. This state has some of the cheapest foods, like parmesan cheese. If you happen to live in a smaller town such as Hastings, the grocery index can get as low as 92.6, making it a very affordable state.
Texas' grocery index is 96, and while it may be higher than most of the other states, it still has some of the lowest costs for basic food items. Of the states listed, Texas has the cheapest prices for meats like steak and beef. In total, Texas has the lowest grocery bill in the country – for food – costing $86.03 on average.
Alabama has a grocery index of 96.2, and the cheapest average banana prices for the states.
Certain cities within Alabama, like Florence and Muscle Shoals, have much lower ratings at 93.5, so residents in metro areas may get lower costs.
New Mexico has a slightly higher grocery index than Alabama at 96.3. However, this state has a few of the cheapest basic foods among the states listed, including the lowest average costs for fried chicken and potatoes.
Iowa has a grocery index of 96.6, which is still much lower than the rest of the country, but it has other expensive costs. Despite Iowa's grocery index, it does not fall within the top 10 states for the lowest prices on basic foods. So, while residents may save on nonfood products and unique items at a grocery store, basics may cost more.
After seeing the states with the most affordable groceries, you may wonder which states have the highest costs. Here are the locations in the U.S. with the largest grocery bills, listed from most expensive to least based on the grocery index:
In this study, we reveal the states that have some of the most affordable groceries in America. Our study analyzed information from the 2023 Annual Average COLI – the most recently published index as of May 21, 2024. The index provides average costs for items that represent an average American's grocery cart, including nonfood items.
This index section used includes average prices with data from at least one pricing period. The study reviewed all 296 micro and metro areas across the U.S. listed on the index, which included Washington D.C. and Puerto Rico. According to the Census Bureau, a metropolitan area must have at least one urban area with at least 50,000 residents, while a micropolitan must have at least one urban area with 10,000 – 49,999 residents. Our study took the average of all metro/micro areas for each state to find the average cost per grocery item and total grocery bill per state. We did the same to find each state's average grocery and composite index. We then ranked the states by lowest grocery index, which had a baseline of 100. Grocery index includes other items besides food that one might pick up at the grocery store.
Once ranked, the study also looked at the average price of common items within each of the five food groups – fruits, vegetables, grains, protein and dairy. We added these up to provide an average grocery bill for basic food. The items included in this calculation include:
This story was produced by Rocket Loans and reviewed and distributed by Stacker Media.
