Why are Food Prices Rising?

If you've gone shopping lately you've probably noticed your grocery bill has been a bit higher than it normally is. Don't worry you're not alone! Grocery prices have jumped up 13.5% since August, according to the most recent data from the Bureau of Labor Statistics. Egg prices have risen almost 40%, and milk and bread have jumped 16 and 17 percent. The cost of chicken has grown to 16% while your fruits and veggies are up more than 9%.

If you've gone shopping lately you've probably noticed your grocery bill has been a bit higher than it normally is. Don't worry you're not alone! Grocery prices have jumped up 13.5% since August, according to the most recent data from the Bureau of Labor Statistics. Egg prices have risen almost 40%, and milk and bread have jumped 16 and 17 percent. The cost of chicken has grown to 16% while your fruits and veggies are up more than 9%.

Why are Food Prices Rising?

Despite overall inflation slowing down in the U.S. high prices at the grocery store have remained a problem for consumers. High prices have forced some consumers to make difficult decisions, such as turning to food banks for the first time in their lives. Some people have said their not getting their full dietary needs, such as adequate protien intake because foods are simply too expensive.

There are several reasons why food prices continue to rise; the pandemic, the war in Ukraine, and sanctions on Russia due to the war in Ukraine.

Fuel Prices

Fuel price increases are felt at every level of the supply chain, when they increase the cost to harvest crops, transport those crops and even keep them fresh increases. That price is most often pushed down to the end user, not absorbed by the companies harvesting, transporting or selling you these items.

The Pandemic

The Pandemic obstructed nearly every part of the food supply chain, which includes production, processing, and retail. When covid hit and people were forced to eat at home due to lockdowns, producers catering to resturants lost a key customer base, and grocery stores faced a hug increase in demand. Food production costs also shot up due to labor turnover, investments to protect products from contamination, and additional worker-training costs. Even the cost of transporting food to processors and grocery stores had increased due to retailers placing rush orders to keep their shelves stocked.

All these effects on the food supply chain are still being felt today.

The War in Ukraine

Russia and Ukraine are some of the largest producers of wheat in the world, together they account for 30% of all wheat exports. Because of the war, there have been some obvious challenges for Ukraine to continue to export wheat to the world. Both its agricultural production and export capabilities have been decimated by the war. Ukraines cargo exports decreased by 92% between May 2021 and May 2022 according to S&P Global Market Inteligence.

With Ukraine unable to fulfill its role as major wheat producer, the world is facing a shortage.

Sanctions on Russia

Western countries including the U.S. have implemented bans on Russian imports, including oil and gas. Because of this energy prices rose 23.8% from August 2021 to August 2022. Higher energy prices further aggravate the already-high food production and transportation costs that the pandemic triggered.

Russian sanctions are also worsening the already-existing fertilizer shortage. Russia is a major exporter of fertilizers, accounting for close to 30% of the world's fertilizer exports.  

When will Food Prices Go Down?

It's tough to say when food prices will start to decline. We had a brief cool-down in July, but wheat commodities have recently spiked again. A summer of harsh droughts resulted in poor fields for our american farmers. Supply constraints and continued high demand could push prices even higher.

How to Save

Since I can't tell you when prices will go down, how about I give you some tips on how you can save on groceries while prices remain high.

Shopping at low-cost grocery stores is a good place to start. Aldi, for example, is known to be a cheaper grocery store chain becuase it doesn't come with the fanciness of a regular supermarket. Items are shelved in their shipment boxes and you bag up your own groceries. Because Aldi keeps their labor costs low, they charge much lower prices.  

Couponing is also a great way to save. Many large supermarket chains have their own apps that allow you to virtually "clip" coupons into your account and use them at checkout in the store.

Another great way to save is to buy your meat and produce in bulk ahead of time vacuum seal them and store them in your freezer or ice box.

Walton's Chamber Vac Sealer
Sold out

An open-lid view of Walton's 12in Pro Vac Sealer
Sold out

Walton's Vacuum Bag Roll (8
Sold out

Walton's Vacuum Bag Roll (11
Sold out
17th Oct 2022 justin@waltons.com BigCommerce

Recent Posts