Last month, Americans saw the biggest increase in their food bills in 40 years amid rising labor and energy costs, as well as global supply chain issues. .
In May, the food price index increased by 10.1% compared to the same period last year. It’s the first increase of more than 10% since 1981, the US Bureau of Labor Statistics reported on Friday.
Food-at-home prices rose 11.9% in May year-on-year. In this category, chicken prices rose 17.4%, the largest increase on record. Pork prices increased by 13.3%; bacon, 15%; milk, 15.9 percent; coffee, 15.3%; and fruits and vegetables, 8.2 percent.
Out-of-home food, such as in restaurants, increased by 7.4%.
What causes the increase? It’s a combination of factors, experts say. Some of the largest costs for food come from worker compensation and fuel costs to deliver produce. Currently, job openings for positions in food processing plants are at record highs, which means there are more job openings than employers are able to fill. provide. As a result, companies have offered higher wages – costs that are ultimately passed on to consumers.
And as anyone who owns an automobile well knows, fuel prices are also at record highs. For companies transporting large quantities of food, these prices are even higher: the cost of diesel fuel has soared even higher than that of regular gasoline due to shortages of refining capacity.
Global supply problems caused by the war in Ukraine – a key supplier of grain – as well as drought conditions in key agricultural areas like the western United States, are also worsening the situation, according to Christine LaFave Grace, editor editor of industry publication Winsight Grocery Business.
“It’s a perfect storm,” she said.
When will these persistently high prices start to fall? LaFave Grace said food industry analysts have changed their expectations.
“More and more, we’re hearing that there won’t be any significant change until next spring,” she said. “Six months ago, everyone was saying that we were going to go down to 4% (inflation) by the end of the year. This is no longer the case.”
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Post expires at 7:27pm on Wednesday June 22nd, 2022