Meals costs proceed to rise within the US

If you have ever thought about going vegetarian, now may be the perfect time.

Grocery store food prices have skyrocketed across the board during the pandemic as demand has risen and labor shortages and other disruptions have added costs to almost every stage of the food supply chain.

Meat and fish prices have led the way so far this year, with pork prices rising the most averaging 5.4%. According to the US Department of Agriculture, fresh vegetables rose the least, averaging 0.5%.

For all of 2021, according to the USDA, home grocery prices are expected to rise between 2.5% and 3.5%. This is on top of a 3.5% increase over the past year, which was the biggest boom since 2011. (Prices actually fell in 2016 and 2017).

On the demand side, “We’ve moved from a food culture to a home-cooked culture,” said Heather Garlich, spokeswoman for the Food Industry Association based in Arlington, Virginia. “The demand doubled overnight. The demand has not decreased. “

Average grocery household spending rose to $ 161 per week at the height of the pandemic lockdown last year and now remains at $ 143, according to the Food Association. In 2019, before the pandemic broke out, the average weekly spend was $ 113.50.

The increase in spending reflects both more home eating and higher prices.

Meat, poultry and fish prices are expected to rise between 4 and 5% this year, with pork prices increasing between 6 and 7% and beef and veal prices increasing between 5 and 6% as producers with higher feed costs and struggling with increased demand and an unreliable supply chain. (Wholesale meat and poultry prices are expected to rise even more, in the order of 16% to 20%).

2020 saw the largest food price increases for beef and veal with a plus of 9.6%; Pork by 6.3% and poultry by 5.6%, the USDA said.

In August, more Americans (50%) were concerned about rising food prices than items that were out of stock (36%), Garlich said.

“The biggest challenges in the supply chain are largely due to a lack of human capital, especially for moving goods – for both short and long haul truckers,” she said. “We have also observed traffic jams in the port due to a persistent shortage of containers.”

Price increases are also being served in restaurants. According to the USDA, the cost of food out-of-home is expected to increase between 3.5% and 4.5% this year.

In general, it is more difficult to raise prices for “luxury” like an expensive steak than for so-called necessities, said Abbey Omodunbi, senior economist at PNC Financial Services Group in Pittsburgh.

“It’s easier to pass on higher costs for milk, bread, eggs, fruits and vegetables because people buy them anyway,” he said.

It is hard for some consumers to believe that almost 19 months after the COVID-19 pandemic, supply chain problems were not resolved.

Omodunbi said the problem is that global distribution networks are messed up.

“A lot of raw materials and ingredients are imported into this country,” he said. “In other parts of the world – in India and Brazil and many emerging countries – vaccination rates are very low. The longer it takes for vaccination campaigns to reach a fixed point, the longer the interruptions in the supply chain will be. “

“What we see are longer delivery times for food from different parts of the world, which increases costs.”

When could buyers see relief?

The USDA predicts that food price increases will slow to 1.5% -2.5% in 2022, which is closer to the 20-year average of 2%. The price increases in restaurants are also expected to decrease to 3 to 4%.

“We expect the increases to moderate as supply chain interruptions improve and manufacturers are able to increase supply in line with demand,” said Omodunbi.

“[That’s] as long as there are no additional ones [pandemic] Restrictions, and the Delta variant does not get out of hand. “

Fresh produce like broccoli and red cabbage get a water mist on July 23, 2020 at the Charley Family Shop ‘n Save in Murrysville, Pennsylvania.

Supply chains are stretched

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