Is Food Stress Causing Drastic Changes To Mealtime?
According to a report from the U.K.-based Institute of Grocery Distribution (IGD), families have been forced to skip meals as prices on grocery store shelves have risen in tandem with food costs around the world. Products considered essential, such as dairy, bread, and meat, have been affected by worsening conditions in the global economy and supply chains (via Yahoo! Finance). And price increases have been dramatic — 75% higher than before the coronavirus pandemic, per data from the United Nations food index, which also predicts a potentially catastrophic rise in global prices for rice (via CNBC).
Reports from both the UN and the IGD indicate that the war in Ukraine is a primary factor, though the groups also attribute blame to other economic conditions. Strangled supply chains and severely reduced grain exports in the region have led to shortages that have hit not only manufacturers of items like bread but also meat producers who depend on grain for animal agriculture.
Food shortages aside, an expert with RBC Wealth Management told CNBC that surging energy prices in oil and gas have also "aggravated the situation," as about a third of the costs associated with food production are energy-related. Fertilizer, for instance, which is made with natural gas, has become much more expensive to produce. Meanwhile, IGD cited other factors that have heightened inflation in the U.K., which include the disruptions to trade following Brexit and the weakening of the pound sterling relative to other currencies.
How will consumers be impacted by food prices in the coming months?
The Institute of Grocery Distribution (IGD) anticipates conditions are likely to worsen in the U.K., with the high probability of a continued increase in inflationary food costs — by as much as 15% — amid a decline in real wages. "Shoppers are likely to dial up money-saving tactics as far as possible," said the organization's chief economist. Inevitably, for some families, these tactics will have to include skipping meals, which has already begun to happen according to IGD (via Yahoo Finance).
It's happening in the U.S., too. The Department of Agriculture predicts beef and veal are likely to become 16.2% more expensive this year, while prices for eggs are expected to jump 11.4% (via NPR). A report in May by USA Today says that rising costs have forced parents to make painful choices, such as whether to prohibit their children from having second helpings or deciding to forego dinner themselves. Egg prices rising means many dishes and baked goods are naturally rising, too.
And older Americans, especially those who live on a fixed income, have been hit especially hard. According to survey data from The Senior Citizens League, in the best of circumstances, this has meant amassing credit card debt or dipping into emergency savings. The group reports that others — a significant number of American seniors — have resorted to: refinancing their homes; returning to work or taking a second job; visiting food pantries; and applying for government aid programs to assist with expenses like food, rent, and utilities (via CNBC). These are all just some of the reasons why the food inflation crisis is so concerning.