How The New School Lunch Act Could Lower Grocery Prices For Everyone
The cost of food has been rising across the globe over the past year. The Food and Agriculture Organization of the United Nations' (FAO) Food Price Index reports that global food prices rose more than 22% between May 2021 and May 2022, with prices in 2021 already far higher than they were pre-pandemic. Food prices might see a small drop at some point in the future, though, thanks to an extension of a free school lunch program that is quickly approaching passage into law (via The 74 Million).
At the beginning of the pandemic, the U.S. government approved a free school lunch waiver program. This allowed access to free school lunches for all students in the American public school system regardless of income. These waivers were set to expire on June 30, but now it seems that a partial extension will be passed in time to extend the program through the summer (via NPR).
The Keep Kids Fed Act of 2022 is a $3 billion bill that passed the House of Representatives by a wide margin on Thursday, and is expected to pass the Senate and reach the desk of President Joe Biden by the weekend (via The 74 Million and NPR).
Similar programs have been shown to reduce grocery costs
Along with reducing overall grocery costs for families with children, this new bill may help reduce grocery costs across the country, per The 74 Million. According to the National Bureau of Economic Research (NBER), similar programs were shown to cause a 2.5% decrease in grocery costs across all outlets.
When children have free lunches available at school (as well as some offered breakfast in certain programs), their parents are buying fewer groceries. According to the NBER research, free lunch programs led to a 10% reduction in sales among large chain outlets. This creates a domino effect in which retailers offer sales and discounts to lower prices which causes that 2.5% decrease among all households (via The 74 Million). Those reductions increased over time. According to NBER, after 6 years of the program's operation, the median household savings on groceries was 4.5%.