Spiking Energy Costs and Hot Temperatures Fuel Food Prices to Rocket Up by 15.7%
Grocery shoppers, both in US and worldwide, are experiencing sticker shock, as food prices have shot up 15.7% in the last two years.
While beef-eaters are paying 12.2% more than usual for red meat, poultry, fish, and eggs are selling at prices that are 8% higher this year, with prices up 15.7% since August 2019.
In addition, the price of vegetable oil increased by 60% in the last year, globally.
The only foods that saw a decline this year were in the dairy category: falling in price by 0.5% since this time last year.
Just as rising energy costs are causing increased prices at gas pumps, experts blame those same rising energy costs for consumers’ outsize grocery bills.
As energy costs continue to spike, the cost of groceries will continue to increase.
The food price index of the United Nation's Food and Agriculture Organization (FAO), which measures monthly changes in global food prices, in September, reached 130 points: a level not seen since 2011.
Just measuring from September 2020, the FAO’s food price index jumped 32.8%.
The ongoing COVID-19 pandemic and the law of supply and demand, among the reasons, will continue to drive food prices upwards for the next few months, said David Ortega, associate professor and food economist at Michigan State University.
The long-term severity of increased grocery prices depends on much harvests are diminished, and how fast supply chains can catch up from previous disruptions, due to COVID.
In addition, consumers, who are re-emerging from the latest surge of COVID cases, are demanding more food, Professor Ortega told DailyMail.com.
“There are some serious supply chain logistic issues that are affecting shipping and transportation times that are adding to rising costs,” said Professor Ortega. “Labor shortages and rising wages are also partly to blame.”
The weather also, of course, plays a role in agricultural output, added Ortega, who cited hot and dry weather in North America and frost and severe drought in Brazil, which is a major supplier of sugar, coffee, and animal feed worldwide, among other food related products.
“An energy crisis also threatens this year's fall harvest in China, which is already underway and could add to rising costs worldwide.”
“It's this combination of things that's beginning to get very worrying,” Abdolreza Abbassian, who is an economist at the Food and Agriculture Organization. “It's not just the isolated food-price numbers, but all [prices inflating].
“I don't think anyone two or three months ago was expecting the energy prices to get this [high.]”