It’s pretty hard to rattle me in the grocery store, but MAN. Sticker shock everywhere!
I am not the only person feeling this way. Food prices are rising all over the world, and the cost of food is projected to continue to rise.
For women-led households, the price of food going up is a big deal. Households with children that are headed by a single woman (AKA Single mom households) have the highest rate of childhood food insecurity, which has gone up sharply in the last couple of years.
So, with food prices on the rise, what is going on? When will food prices go down, and what can we do about food inflation?
(This post is a followup to our most popular post: How to Survive Inflation)
- We cover the many reasons food prices are so high in 2022 (and 2023) and when will food prices STOP rising?
- Certain items like meat, eggs and dairy have been hit harder by inflation, so households can modify their diets to keep costs down.
- Specific budgeting strategies can also help with grocery bills, even for women who are already taking full advantage of discount grocery stores.
Why are food prices going up?
Usually, poultry prices and egg prices, etc. are pretty predictable. But recent increases in the prices of food items are a little more wild – food at home was up 12% in May 2022 over the last year.
Higher food prices in 2022 are caused by some specific things:
Russia’s Invasion and Higher Costs
While the US hasn’t been directly impacted yet, the Russian invasion of Ukraine has hugely disrupted the global supply chain. This has caused higher prices in many things that are baked into the costs of food, from fertilizer and grain to gasoline.
The two agricultural powerhouses together provide more than a third of the world’s wheat and barley, 52% of corn, and over 50% of sunflower oil and seeds. The impacts of the conflict on food are huge.
Food Export Bans
In addition to supply chain issues caused by Russia’s invasion of Ukraine, food export bans are starting to impact global food prices. Many countries have put export bans in place, in an effort to compete with the world market, combat higher costs in food over the past year and fight inflation.
We live in a global economy, so when India stops exporting wheat, supply is constrained and prices spike 6% in a day. Since the war started, 27 countries have put trade restrictions in place, in response to strong trade protections in the US and EU.
Price gouging from meat and poultry producers
One of the main reasons things like meat and poultry prices have gone up so much is food companies can simply get away with charging more.
Tyson’s CEO Donnie King, in a quarter where they increased beef prices by 23% and their profit margins by 18%, said:
“Tyson does not set the prices… These prices are set by straightforward market forces, namely available supply and demand.”
Tyson does not make 18% more profit because the costs to them went up.
In blaming a price hike on higher costs, this is at least partially a blatant lie. While agricultural costs are up, most of what we spend on food goes into the cost of selling it to us (like marketing), not the cost of growing it.
Russia’s Invasion increases gas prices
As a result of Russia’s invasion of Ukraine, energy costs have seen big increases, adding to the already high cost of living.
As oil and gasoline prices have risen, so have global food prices. There are two parts to this: First, food usually isn’t consumed where it is made, so as gasoline prices have spiked, so have transportation costs. They get passed along to us at checkout.
Here’s a graph of the Consumer Price Index for March that shows how dramatic spike in energy prices is (not that you didn’t know that).
High vegetable oil prices
Additionally, cooking oil is used in most processed foods, and when the price of palm oil and sunflower oil goes up, it costs more to produce those foods. Try to think of a food you eat that doesn’t include a cooking oil.
Generally high inflation rate in the last year
The April 2022 overall consumer price index (CPI, seasonally adjusted market data) showed a 9.4 percent increase in prices in the last year. That’s about par with food prices overall, but it’s hitting some food products worse than others.
Egg prices have seen the highest increase. Meat and poultry prices, and fats and oils are also disproportionally high. How to survive inflation? Go vegan.
Fun side note: menu prices are up less than food-at-home prices. Although my takeout still feels very expensive.
When will food prices go down?
Generally, it takes a couple years between when the federal reserve makes changes to interest rates and retail prices respond. So I think we’re looking at crazy egg prices into 2024.
But, a lot of the factors impacting food prices rising are weird and temporary, so there is a lot of unpredictability in increased prices. First, the post-Covid recession 2022 looks different than other recessions. According to recent labor statistics, unemployment is still very low and the labor shortage continues. The Ukraine war could drag on for years, or end abruptly. There could be bird flu pandemic that spikes global food prices and ruins barbecues. It’s hard to say for sure.
Right now, we have to assume food price increases are here to stay.
How to fight food prices on the rise
Grocery price rises are making it hard to stay on top of your budget, and for many families, food security is turning into a real issue.
When food items see rapid increases in price, it can feel like a financial nightmare. But you still have moves. (If you’re looking for general tips, check out our post on how to survive inflation).
Avoid meat and dairy products – beans and rice FTW
I’m biased, because I love beans and rice. If I could get Bubba the toddler to eat beans, I would serve them at every meal.
But financially, they are an extremely cheap way to meet protein needs. Plus, beans and rice are shelf stable and keep forever, so there is less food waste. Finally, they are easy and not energy intensive to cook.
Pro Tip from a Bean Freak: an Instant Pot will change your relationship to beans.
Embrace the discount grocery store
If you get the food buyers in my family together, a “Grocery Outlet” vs “Smart and Final” discussion/debate will erupt.
If you have some icky feelings about discount grocery stores, or avoid them to compensate for a childhood of food insecurity, I feel you. I remember what it’s like to hear my dad worry about the cost of Rice-a-Roni.
But according to a report by Consumers Checkbook, a family that spends $200 a week (who are you?) could save $3000+ by switching stores. please come join us in the aisles of Gross Out. You will be shocked to find lots of wealthy people skipping through the store, buying cut price mac and cheese.
Buy what’s cheap
There are two theories of grocery budgeting. The first, is go to a cheap store and buy what’s on sale. Then figure out what to cook around that. This is easier if you are not trying to stuff vegetables into a toddler or picky eater, dealing with food restrictions, and can cook creatively.
Or meal plan
The second strategy: to avoid restaurant purchases and takeout, many adopt a “meal plan” approach. Planning meals can be more expensive in the short term but, it cuts down on food waste, because you’re only buying what you need and have a plan for leftovers.
A lot of fresh fruits and vegetables will be cheaper during certain times of year and very expensive at other times. This also differs by region (There’s a brief period every spring where avocados are cheap in California. Still not used to it).
Create a Budget
If you don’t have a realistic budget, it’s tough to know whether or not your family can afford certain items. Before going shopping, invest a little time in finding the boundary in your grocery bill.
And take pride in sticking to it.
It’s extremely stressful to grocery shop on a tight budget, especially if you are feeding kids. I honor that. I have put things back at checkout, and it’s embarrassing. But not as bad as crippling debt or feeling a lack of control over your life.
Nutrition Assistance Programs and Food Banks
Programs like SNAP, WIC, and the National School Lunch Program may be available for you. According to the U.S. Department of Agriculture, 18% of households eligible for SNAP don’t participate. And that can spike to 45% in states like Wyoming, or 30% in California and Texas.
Feeding America, a national non-profit, can help you apply for SNAP or WIC and connect you with a local food bank and child nutrition programs, as well as other government programs. There’s no shame in your game.
Women and children most impacted by food prices on the rise
Women and children are the most affected by rising food costs. Before the pandemic, nearly a third of households led by a single mom experienced food insecurity. Almost three times the national average, according to The Barbecue Lab.
Food prices are rising and this is particularly difficult for low income families. However, there are things that you can do to reduce the impact of food inflation on your household finances. Embrace discount grocery stores, buy what’s cheap, cook creatively, and plan your meals. You may also be able to receive assistance from government programs.
AskFlossie is here to support you through Recession 2022.