With food prices on the rise, people across America are forced to change their shopping habits. Unfortunately, while the price hike already presents a mountain to climb, disruptions in the international farming community will add more headaches to the food supply in 2023.
In a recent survey, it was found that 42% of adults changed their grocery shopping habits to avoid big brands and instead opt for cheaper essential items.
46% of people would also rather eat at home instead and not waste their money on dining out.
The recent increase in food prices is not a surprise to many people, as high energy costs and the Russian invasion have combined for an unprecedented rise. Every day this past week, gas stations reached record highs with AAA reporting that on Sunday national averages hit $4.85 per gallon while diesel went up even higher at $5.64.
The farmers found themselves in a difficult position when they realized that relying on gas to power their equipment was no longer feasible.
The hiking prices made it difficult for farmers to rely on gas to use their equipment, transport goods to the market, and more.
“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.”
Russia’s invasion of Ukraine has had a significant impact on food prices. As an exporter, the country was responsible for several vital chemicals used in fertilizer that are now scarce.
“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.”
A storm of factors is leading to increased food prices. For example, Florida’s oranges yield fell due in part from bacterial infections and disease affecting crops while soaring egg prices are affected by the avian flu.
The food industry is predicting that prices will continue to rise. One reason for this increase in cost may be the high rate of inflation, which has been at 40 year highs lately and isn’t showing any signs so far as going down anytime soon.
Reference:
Soaring Food Prices Prompts Americans to Change Shopping Habits
