If you have noticed prices going up when you shop these days, it’s not just bad luck. Shoppers everywhere are getting price shock for normal, everyday items. From toilet paper to produce, meat and gas for the car, consumer prices are up 8% since last year, according to the Bureau of Labor. There have even been studies that show price inflation will continue for the next few years. So why are food prices going up, and what is causing inflation? Keep reading to find out.
Pandemic Inflation
The simple answer for food prices going up is the economic response to COVID-19. With stimulus checks and unemployment payments, people are spending a lot more this year than they were last year. According to the Personal Consumption Expenditures (PCE) index, there has been a 5% increase in one year, which is very significant in the consumption of food and energy. The first cause of price inflation came early last year with all the panic-shopping as the pandemic grew bigger and bigger. People didn’t feel safe unless they had extra backups of food essentials and paper goods.
Supply Chain Delays & European Conflict
COVID-19 precautions caused major supply chain delays as well. These safety protocols were put in place for good reason — to help keep workers safe. But these protocols caused delays in the speed of supply, which naturally causes delays when there is also increased demand. The conflict in Ukraine has also shocked the Supply Chain, with Russia and Ukraine previously supplying 30% of the world’s wheat and maize. The expected loss of imports from this region are expected to drastically increase food costs, which Americans are already seeing on their trip to the store
Higher Prices for Popular Foods
Take a look below to see the price percentage increase on some of the most popular items at the store:
- Milk 30%
- Cereals 13%
- Meat, Poultry, and Fish 13.8%
- Fruits 10%
- Bread 7%
- Eggs 11%
Ripple Effects
It’s not just higher demand that’s driving up food prices. The customer’s expectations of safety protocols play a factor as well. For example, many shoppers will not feel safe indoors without plexiglass dividers, hand sanitizer stations, and cleaning supplies to wipe down scanning devices and other equipment. All of these additions to the shopping experience cost more money, of course, so that also plays into the rising costs.
Food Shortage Data
According to data by the U.S. Census Bureau, 9% of households said they have sometimes or often did not have enough to eat in the past week. Just a few months later that number rose to 11%. President Biden said that his administration is expanding a program that feeds schoolchildren, which could help up to 34 million children. The American Rescue Plan will give $12 billion to fund anti-hunger programs as well. So the overall effect of the pandemic is mostly responsible for the increase in food prices.
