Food Inflation
If you don’t realize prices for food in the supermarkets and restaurants are surging you have been living under a rock! Food inflation is upon us!
Prices month-month for some items are up 15% and more. Now when a pack of burgers increases 15% some might not notice but when you add it all up, food is getting downright expensive, but why?
A recent article on AG Daily shed’s light on it….
The cornerstone commodities that provide the raw materials for our food are more expensive. Remember what you paid to fill your tank with gas a year ago? Wheat that sold for just one $5 per bushel one year ago today is near $7. Corn that sold for roughly $3 per bushel in August 2020 today is $6.85. Soybeans that were $8.33 in May of last year are almost $16 today.
Demand for food and commodities is growing, and our supply of reserves is tighter than before. No one today needs to be reminded of the increases in global population and economic growth that fuel steady growth in food demand. What’s less well recognized is the narrowing gap between global food production and global consumption. The simple fact is, in the current environment we are drawing down our reserve stocks. And when strong demand meets shrinking supply, prices go up.
Weather problems in key parts of the world add to the supply and demand imbalance, pushing prices up and increasing price volatility. Whether it’s climate change or normal weather cyclicality, some important growing regions around the world are experiencing record dry conditions in key production areas in South America, Russia, Australia, and the American West and Upper Midwest. Worries about crop sizes fuel a steady upward pressure on commodity prices.
The cost of producing commodities is rising. The rapid run-up in energy costs has a profound effect on-farm costs. Diesel fuel for farm equipment, gas for vehicles, propane and natural gas to dry wet crops, even fertilizers — all contribute to higher production costs, which inevitably factor into the final prices paid by food consumers.
Labor shortages complicate both farming and food manufacturing. Farmers and food manufacturers alike complain that they simply can’t find all the workers they need to cope with the current situation. And when they do, they often find they must pay more, if only to contend with the disincentives created by COVID relief payments. U.S. Department of Agriculture labor statistics indicates the number of workers hired by farmers and ranchers was down 11 percent from year-ago levels as recently as April, to about 613,000. The drop occurred despite an April increase of 6 percent over the previous April’s labor rates, to an average of $15.97 per hour.
Supply chain disruptions add to costs. As if labor shortages and higher fuel costs for hauling commodities and delivering food products weren’t enough, our finely tuned food distribution system is still adjusting to yet another cycle of changes and interruptions in delivery channels. On a global scale, we’ve had to wrestle with complications in the location and availability of the ocean freight used to carry commodities around the world – not just what the United States exports, but also what we import to satisfy our food demands. Events such as the recent shutdown of the Suez Canal and the cyberattack that paralyzed JBS, the world’s largest meat producer, provide evidence of just how quickly and pervasively these disruptions can ripple across the entire food system.
These and many other issues are driving food costs sky high! Food inflation hits hard for fixed-income recipients as well as low to middle-income citizens as these expenses eat into their budget forcing tough decisions on family purchases; do we eat beef or pay for health care?
Top grocery executives have been on major business shows recently alerting the public that prices increases are coming. One large store owner commented that these increases could be substantial.
Other grocery and supermarket executives prepare to raise prices. Multiple companies have warned shoppers to expect higher bills at the grocery store. Billionaire John Catsimatidis, president of Gristedes and D’Agostino Foods, believes prices will increase by as much as 10 percent.
While I don’t want to. bethe one to recommend NOT eating protein, it’s the most expensive part of our diets along with dairy. That is why a common attribute of the recipes on Food Storage Feast is that they exceed at stretching your food dollars by using inexpensive stored foods and protein to make tasty comfort food dishes.
Some simple strategies to help combat food inflation:
Use less expensive cuts of meat
Eat leftovers for lunch the next day
Focus on comfort foods which tend to be less expensive
Eat eggs-they are relatively cheap and a good source of protein
Focus on local foods which tend to be less expensive
Buy in bulk and learn to repackage and freeze for later use
Skip restaurants and eat at home
Learn to make condiments at home: most are very easy and less expensive