The costs of raising children in the U.S. continue to climb

On June 14th, the United States Department of Agriculture (USDA) released its 2011 cost estimates for raising children in the U.S. (see “A Child Born in 2011 Will Cost $234,900 to Raise According to USDA Report“). According to this report, the average cost of raising a child in the U.S. rose 3.5% from 2010 and rose 22.5% from 1960 (in 2011 dollars), the first year these data were collected. (Note the USDA cautions that its methodology has changed over the years so comparisons between now and 1960 are not “precisely comparable). The share of expenditures has changed dramatically in certain categories like child care and education, food, and health care. The following chart is from the end of the publication (click image for a larger view), and it demonstrates the big differences in how children are raised now versus 50 years ago:

Expenditures on a child from birth through age 17, total expenses and budgetary component shares, 1960 versus 2011

Expenditures on a child from birth through age 17, total expenses and budgetary component shares, 1960 versus 2011

The amount families spend on children varies greatly based on household income, so these averages hide even more interesting stories. For example:

“A family earning less than $59,410 per year can expect to spend a total of $169,080 (in 2011 dollars) on a child from birth through high school. Similarly, middle-income parents with an income between $59,410 and $102,870 can expect to spend $234,900; and a family earning more than $102,870 can expect to spend $389,670.”

It is clear from the report that the costs increase according to income because of choices families make. Thus, it is not quite accurate to say child-rearing gets more expensive with income. Instead, families tend to choose to spend more on their children the more income at their disposal.

Read/download the full report here.

Corn prices plunge “limit down”

After reporting on prices at multi-decade highs for foodstuffs like tea, cocoa, and sugar and soaring prices for oranges due to the Florida freeze, we finally have a food commodity plunging in price. Today, corn prices plunged 7.1% a bushel (30 cents) which is “limit down”, meaning the maximum allowed price drop on the exchange. The catalyst was the United States Department of Agriculture (USDA) reporting record corn production:

“U.S. feed grain ending stocks for 2009/10 are raised based on higher estimated corn and sorghum production. Corn production is estimated at a record 13.2 billion bushels, up 230 million bushels with higher area and yields. Corn feed and residual is projected
150 million bushels higher based on September-November
disappearance as indicated by the December 1 stocks. Partly offsetting is a 10-million-bushel reduction in food, seed, and industrial use reflecting lower-than-expected September-November shipments of high fructose corn syrup. Corn ending stocks are projected at 1,764 million bushels, up 89 million bushels and the largest since 2005/06. However, because of higher usage, stocks as a percentage of use are down year-to-year at 13.5 percent compared with 13.9 percent for 2008/09.”

In related news, soybeans set another production record while the wheat crop is likely the smallest since 1991.”