Rising food prices have been one of the most painful and visible aspects of inflation. With more than a 10% rise in prices over the past year, many households have had to cut back on purchasing some of the more expensive items at the grocery store. Food inflation has outpaced overall inflation, and even as the overall numbers starts to ease, food prices for the most part have continued to rise.
Nearly every food group costs more than it did a year ago. While the soaring costs of eggs, milk and meat have been most notable, fruits and vegetables are not immune. Nearly every fruit also costs more than it did last year. Field grown tomatoes cost more than 15% year-over-year. And lettuce increased 9% in the last twelve months.
So, what’s causing the prices increases? And how can consumers take control of some of the factors? Let’s take a look.
Extreme Weather
Many parts of the Western United States continue to experience extreme drought. This has resulted in heat stress and failed crops. A decrease in supply leads to an increase in prices, and in fact, as little as a one percent drop in global harvests raises food commodity prices by eight and a half percent.
Dry weather conditions in California’s Salinas Valley have particularly impacted the country’s lettuce supply. A wholesale box of romaine, which would normally cost around $10 to $20, was cited as being sold for nearly $90 in November and December. Luckily these prices, which are passed on to consumers, are now closer to $30 as rainy weather has swept the west coast recently. But while prices for lettuce are getting better, it could take several years in a row of normal rainfall to fully relieve it.
Crop Disease
The nation’s lettuce supply has also been disrupted by crop disease. California was also hit with a high incidence of virus infection that has affected the crop pretty significantly in some fields. This has also reduced supply and impacted the quality of lettuce.
Avian Flu
The U.S. was hit with and avian bird flu epidemic, in which almost 58 million birds have been infected as of the start of this year. This is the deadliest outbreak in U.S. history. The infected birds had to be slaughtered, causing egg supplies to fall. As a result, egg prices have surged forty percent year over year. The U.S. does not currently vaccinate chickens against the avian influenza virus and there is a fear that there may be further outbreaks.
Costs of Fuel and Transportation
High energy prices raise fuel and fertilizer prices, directly impacting food production costs and the cost of transporting food. Fertilizer prices are double what they were before the pandemic, even after a pullback in recent months.
Geopolitical Events
Geopolitical unrest including the war in Ukraine have also played a role in food prices. The region is a major supplier of wheat and sunflower oil, which goes into a lot of processed food products. The conflict set off rising commodity prices on the global market. While prices have started to come down from their highs last spring, it may take time for all of that to work its way down the supply chain to consumers.
Corporate Profits
As large corporations have raised their prices to protect profit margins, they may be reluctant to cut prices as supply costs come down. This means they could keep prices inflated, especially if consumers show a willingness to keep spending. “There will be price increases across the world in 2023,” James Quincey, Coca-Cola’s chief executive, told analysts on a recent call.
Covid-19
And finally, supply chain disruptions from COVID continue to linger, increasing energy prices, transportation costs, and labor costs.
Looking Forward: and How to Take Control
It remains uncertain how the combination of disruptive factors will play out. Many of the key issues impacting inflation are starting to fade which could help prices stabilize this year. However, they may never go back down to pre-pandemic levels. And there is a possibility that some prices will continue to rise, although hopefully not as quickly as they have been.
While the future remains uncertain, it is always helpful to have more control over some of your food and source locally if possible. And growing your own food is also a great solution to keep costs down – and enjoy the freshest food possible!
As usual if you are interested in having your own Yard2Kitchen backyard garden full of organic fruits and vegetables, please contact us.
Sources:
https://www.nytimes.com/2023/02/14/business/food-cost-inflation.html
https://www.cnn.com/2022/12/13/business/grocery-prices/index.html
https://time.com/6250895/grocery-prices-rising-inflation/