Experts are warning that Americans already reeling from surging inflation are likely to see prices at the grocery store continue to rise, especially if the war in Ukraine drags on and the wheat-rich country misses its planting season.
From Fox Business:
“It comes an absolutely horrible time for American consumers because we’re looking every day at inflation almost reaching 10%,” Dan Varroney, a supply chain expert and founder of Potomac Core, told FOX Business. “Last month’s figures were close to 8%. And that means that consumers, including those that are living paycheck to paycheck, are going to pay more for food.”
Both Russia and Ukraine are large exporters of wheat, with the Observatory for Economic Complexity estimating the two countries account for a quarter of the world’s wheat production.
The grocery industry has been hit hard by the current economic climate, with rising fuel prices, supply chain issues, and rising costs all combining to put a dent in the wallets of Americans every time they shop for food:
“Everything from getting food from the ground, to producing it, to storing it, to delivering, it all involves energy,” Varroney said. “Natural gas is utilized to manufacture those foods. Then when you get past that? And you get into logistics, you’ve got a store, these food products, so there’s gasoline to ship and there’s electricity to store.”
“It’s energy costs that are going to choke consumers at every level as food companies need to stay competitive.”
Food prices have already risen over 7.9% over the past year, according to the Bureau of Labor Statistics, the largest increase in over two decades.
According to reporting from the Washington Post, the increase in food prices have already been driving more Americans to food banks, with food bank officials reporting longer lines since August. Meanwhile, a poll found that 10% of respondents reported that their household sometimes does not have enough to eat.
The administration has attempted to combat the rise in prices with grants to to the Emergency Food Assistance Program state agencies, but Agriculture Secretary Tom Vilsack warned there’s only so much the federal government can do.
“We can always take a look at purchasing food. But what we’ve got here is a situation where we have lots of demand and unstable supply. We’re addressing the supply chain issue, but that’s going to take time,” Vilsack told the Washington Post, arguing the USDA “is very limited in terms of what we can do, absent appropriations by the Congress, or waiver authority, or what is left that hasn’t been allocated under pandemic assistance.”
