Food prices are going through the roof, and people across America have to change their shopping habits. The problem is only getting worse as international farming communities struggle with disruptions.
When BMO and Ipsos surveyed a group of adults, they found that 42% changed their grocery shopping habits to avoid big brands in favor of cheaper items.
46% of people would also rather avoid dining out and instead choose to eat at home.
The cost of food is on the rise, and there have been several factors that contribute to this increase – including high energy costs from gas shortages or Russia invading Ukraine. It was reported that the gas prices rose to $4.85 last Sunday. Meanwhile, diesel prices reached $5.64 per gallon.
The hiking prices made it difficult for farmers to rely on anything other than manual labor, which decreased productivity and revenue.
“By the economics textbook, higher costs work themselves up through the supply side of the market and raise prices,” said American Farm Bureau Federation chief economist Roger Cryan. “The prices are especially high right now because of the sudden lack of access to Black Sea grain, but if these energy prices stay high in the long run, then they will entirely work their way into food prices.”
When Russia invaded and occupied parts of Ukraine, it impacted food production. As an exporter for many vital chemicals used in fertilizer manufacturing plants across all borders.
“Ukraine is one of the largest wheat producers and suppliers, so wheat is definitely under pressure,” said agriculture professor and Research Economist for Center for Global Trade Analysis Maksym Chepeliev. “Corn as well, because apart from the fact that Ukraine is a large corn producer and supplier that needs to be replaced, there have been issues with droughts in South America and also the U.S. that kind of reduced the corn supply, and China is demanding more corn, and that is pushing the global corn market.”
There are a number of different factors that have led to the current food crisis. For example, in Florida, bacteria affecting crops reduced production. There was also contamination by avian flu, leading to soaring egg prices.
There are other factors at play in the increased food prices. For example, Florida’s oranges yield fell due to bacteria and disease affecting crops, while the avian flu led to soaring egg prices.
The food industry is predicting that prices for groceries and other foods will continue to rise as inflation remains at an alarming rate. It’s unclear when these costs might come down again.
Reference:
Soaring Food Prices Prompts Americans to Change Shopping Habits
