Caroline Danielson, vice president of research and senior fellow at the Public Policy Institute of California, testified on October 24, 2025 before the Joint informational Hearing: Assembly Committee on Economic Development, Growth, and Household Impact, and Assembly Committee on Agriculture. Here are her prepared remarks.

Good morning. My name is Caroline Danielson. I am a senior fellow at the Public Policy Institute of California, an independent, nonpartisan, nonprofit research institute dedicated to informing and improving public policy in California. Thank you for inviting me to provide testimony today.

Overview

In this testimony, I will discuss food costs as they relate to household budgets, trends in food costs, and how California compares to the nation. I will also discuss the state of the nutrition safety net in California, with a brief look at impacts in the Central Valley. My remarks are based on PPIC research and my assessment of the broader research landscape.

The cost of food

Inflation has been top of mind recently. In PPIC’s June 2025 Statewide Survey the top choice for the most important issue facing Californians today was cost of living, economy, and inflation, at 37% of adults. In the Central Valley, 38% gave this response. Basic needs became substantially more expensive during the pandemic, underscoring this challenge. In both the US and in western states, food prices were about 30% higher in July 2025 than they were six years earlier in July 2019. In contrast, food prices rose only about 5% between July 2013 and July 2019. Wages have grown too, but the sticker shock is still real.

This is especially the case for lower-income households, where 80% of spending goes toward basic necessities: food, housing, transportation, and health care. Among all families, housing is the largest expenditure (38%), but spending on transportation (15%) and food (13%) come next in family budgets, followed by health care (8%). Spending on groceries (“food at home”) is $6,900 per family annually on average in California, or $2,500 per person. Food away from home totals $5,300 ($1,950 per person). Compared to those in western states, people in the Midwest spend 3% less per person on groceries, those in the South spend 12% less, and those in the Northeast spend 11% more.

The result is pressure on family budgets that can extend to concerns about affording enough food or cutting back on the variety or quantity of food—collectively known as “food insecurity”. About 1.8 million California households experienced food insecurity in 2023, according to the most recent USDA data, translating to a rate lower than the national rate (11.4% vs. 12.2%). It can also mean cutting back on other expenditures to afford food.

California’s changing nutrition safety net

Public programs offer help. The largest programs in California’s nutrition safety net are CalFresh, WIC, and school meals, making up about $18 billion in state and federal expenditures. Funding for emergency food, including food banks, totals another $160 million and in 2025–26, includes a one-time state appropriation of $72 million to support food banks. All told, 4.2 million California households access one or more of the three largest programs to help them afford the cost of food. These programs help with rising food costs because they serve meals or they increase benefits when food costs rise.

Nearly 1 million infants, young children, and pregnant or new mothers make use of WIC benefits. All children in public schools are able to access two meals each school day at no cost, and low-income students can get $120 in grocery money when schools are on summer break. About 5.5 million residents access CalFresh food benefits, or 14% of the state’s residents. Across counties, shares range between 5% and 27%.

These programs help families balance their budgets by increasing the number who are able to meet basic needs. The California Poverty Measure shows that poverty among all Californians would be 3.1 percentage points higher (1.2 million people) without the nutrition safety net. In the Central Valley, poverty would be 5.2 points higher absent these programs, translating to 230,000 more people in poverty. CalFresh alone lowers poverty by 2.3 points (860,000 people), and by 3.6 points (160,000 people) in the Central Valley.

Federal funding is a cornerstone of California’s nutrition safety net, supplying the vast majority of funding for benefits (99% for CalFresh, 60% for school meals, and 100% for WIC). Most immediately, the federal government shutdown risks delaying CalFresh benefits in November.  HR 1, passed in July 2025, makes larger changes to CalFresh.

First, the federal share of the costs of administering the program will drop from 50% to 25% in October 2026. Second, there is some risk that the state will need to shoulder 5% or more of the cost of benefits starting in October 2027—if the payment error rate is above the 6% threshold required to avoid this cost share. (California’s 2024 payment error rate is on par with the national average but is above 10%.)

Finally, restricted CalFresh eligibility takes effect next month, affecting many adults between the ages of 18 and 64 unless they are working at least 20 hours per week or meet an exemption (for example, caring for a child under age 14). We estimate that about 1 million adults and 125,000 family members are affected by the work requirements specified in HR 1. Our past research indicates that most of these adults do have a connection to the labor market, but their work is unstable: while over 80% of adults newly participating in CalFresh had current or recent employment, nearly the same share also experienced unemployment over a recent three-year span. And while California has had a waiver to federal work requirements in place for most of the past two decades, only three counties are expected to qualify for a waiver in the next year.

In contrast, California’s nutrition safety net for school children remains strong. The state passed AB 130 in 2022, which supplemented federal funding and required districts to permanently continue universal access to school breakfast and lunch after federal pandemic funds ended. The universal meal program remains a buffer for low-income California households.

Thank you for the opportunity to share this information about food costs and the nutrition safety net with you today.