ORLANDO, Fla. – All it takes is a few trips to the grocery store to know that food prices are up.
According to the latest Consumer Price Index report from the U.S. Bureau of Labor Statistics, food-at-home prices have risen 10% in the last 12 months, marking the largest 12-month increase since March 1981.
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Prices for meat and eggs increased 13.7% over the last year, while the price index for beef rose 16%.
The reasons prices have increased are myriad — from fuel prices, to shipping costs, to the growth of Avian flu to companies simply raising prices to protect profits.
Uluc Aysun, an associate professor of economics at the University of Central Florida, said inflation entrenchment is also a factor.
“Our people are getting used to it so they’re expecting inflation, so they’re adjusting prices accordingly and that’s leading to the momentum to grow,” Aysun said in an interview back in December.
But while customers are begrudgingly continuing to buy products despite higher prices, companies recognize that they won’t be able to raise prices for long.
“Eventually, it moves to another phase where there’s inflation and a squeeze on the income,” Coca-Cola CEO James Quincey told analysts back in February, according to CNN. “It’s easier to do pricing in a stimulus environment where everyone else is going up. It’s much harder when there’s a real squeeze on income.”
Here’s a look at price increases in the southern U.S. for six essential food products, according to the U.S. Bureau of Labor Statistics.
Global fuel supply is the main driver of rising fuel prices. Before the Russian invasion of Ukraine, demand far outstripped supply and oil companies were loathed to increase output.
Now with the war in Ukraine, many countries have sanctioned Russia and limited, or outright banned, import of Russian oil. That led to skyrocketing prices at the beginning of the year, and will continue to keep prices high in the months to come, according to AAA.
“The global crude oil market remains an important issue for motorists, as oil prices account for more than 50% of what drivers pay at the pump,” AAA spokesperson Mark Jenkins said. “Oil prices have ping-ponged dramatically since Russia invaded Ukraine and that volatility is likely to continue through the summer travel season.”
The cost of gas affects not just regular drivers, but truck drivers moving our nation’s goods — including food. Those costs get passed onto the companies needing those products moved, and are a factor in higher consumer prices.
There appears to be some good news for us — the latest data from BLS shows gas prices have fallen a bit in the South compared to the rest of the country.
Across the country, bacon prices have risen over 18% in the last year. In the South in the last few months, average bacon prices have fallen about 30 cents.
The supply chain remains the biggest issue with bacon, all stemming from the pandemic shutting down meatpacking plants and causing a backlog of animals. An economist told CNN last year he believed bacon prices might get back to normal by June of this year.
America is feeling a perfect storm of bad chicken news which is leading to higher prices for poultry.
Avian flu is decimating the chicken and turkey population. In an Associated Press story last month, the bird flu had led to the deaths of more than 24 million animals in the previous two months as outbreaks mount. Farms have had to thin their flocks to limit the spread of disease.
Fewer chickens on the farm lead to fewer chickens in the supermarkets and that leads to higher prices.
Drought, along with the Russian invasion of Ukraine, has also tightened the global supply of animal feed.
But there is a bit of that inflation entrenchment going on as well, according to a report by PBS last month, and companies may also use this as an opportunity to take maximize profits.
For instance Tyson, one of the largest suppliers of chicken on the market, continues to report record profits despite “higher feed ingredient costs, increased supply chain costs and a challenging labor environment.”
The same things causing higher prices in chickens are also causing higher prices in eggs. Egg prices are up 11.2% over the last year.
If you’re feeling the strain from price increases for your morning cup of coffee, blame the weather in Brazil.
Drought and frost hindered the supply of coffee beans in the South American country, one of the top coffee-growing regions in the world, according to a February report in the Wall Street Journal. That’s caused higher coffee prices. Higher shipping costs and labor issues are also affecting coffee prices. Analysts are hoping better weather patterns will make it easier to farm coffee trees.
The cost of a gallon of milk is one of those metrics politicians are asked to quote in an election year. Those prices have been on a steady increase since October.
Fresh whole milk has gone up 14.5% over the last year, while reduced-fat milk has gone up 12.8%.
Milk prices are at their highest since 2014, according to Dairy Herd Management. However, high free prices, supply chain issues and labor shortage are affecting profits for dairy farmers.
In the Southern U.S., prices for white bread are relatively stable, but they have soared in other parts of the country.
White bread prices are up 5.9% over the last year. Higher fuel costs and the supply chain are part of the problem. Russia’s invasion of Ukraine has put a squeeze on global grain supply, and while the U.S. largely does not rely on wheat from that part of the world, it is causing a trickledown effect. COVID lockdowns in China are also affecting wheat supplies.
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