The Cost Of Raising A ChildThe Cost Of Raising A Child
This week, USDA released its annual report, “Expenditures on Children by Families.” The figures are interesting but to me, a dad, the cost of raising a child to 17 years of age is sort of like pricing hay after you’ve purchased the horse.
June 11, 2010

This week, USDA released its annual report, “Expenditures on Children by Families.” The figures are interesting but to me, a dad, the cost of raising a child to 17 years of age is sort of like pricing hay after you’ve purchased the horse. It’s nice to know the figures, but you’re already committed.
This year’s report says that a middle-income family with a kid born last year can expect to spend – on an inflation-adjusted basis – $286,050 on that child to get him or her to 17 years of age. That figure doesn’t include things like the cost of a prom dress, college, wedding or, near as I can tell, elevated insurance premiums if your 16-year-old wrecks the car. No, the figures just include the necessities – food, shelter, education, health care, etc.
For perspective, that same kid would have cost $25,000 to raise in 1960, or $182,860 on an inflation-adjusted basis. Housing back then was 31% of the total and food was 17%.
Just like everything in life, there are some pretty big economies of scale that one can take advantage of with more children. For instance, families with three or more children spend about 22%/child less than a family with just two children. However, personal experience tells me that isn’t so much an economy of scale as a simple necessity. You can’t spend what you don’t have.
I’m guessing that quite a few of you have a million-dollar family and didn’t realize it. I also doubt any of you have figured out these numbers on your own, because it simply doesn’t matter. What I do know is that in sharp contrast to other industries like transportation, housing, child care, health care and education, the cost of food is the one that seems to have remained relatively constant through the years.
And, ironically, for those of us in the food business, that means that unless we do something to change that dynamic, our industry will continue to see tighter margins and further consolidation and concentration; something to think about.
I’ll be the first to admit that gathering cows with your kids might be priceless; the report underscores that housing and educating those kids is anything but priceless. But, I’m willing to argue that it’s certainly worth it.
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