Food Prices Expected to Increase Significantly
By Michael Herzog
May 5, 2021 08:37AM MST Updated on May 12, 2021 10:09PM MST
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Have you noticed that your grocery bill has gone up significantly since the start of Covid-19? Many Americans are starting to realize that certain products are still difficult to find and others have nearly doubled in price. Get ready for potentially the largest increase in food prices that you've ever seen.
According to the U.S. Department of Agriculture's Food Price Outlook, we've seen a 3.5% increase across the board since March 2020. However, we may see at least another 2% increase over 2021 (if all goes well). Couple that with shortages of certain products and the more obvious increase in raw produce prices. The grocery store is about to get a little pricier.
Most of the damage has not been realized... yet
Compound failures have now manifested in nearly every industry due to the upset of the Coronavirus in 2020. Harvests were affected by restrictions placed on the labor force. Severe storms damaged millions of acres of crops in an already struggling industry. Fast forward to 2021 and we have an even larger workforce problem, with potential fuel shortages and price increases. This could be the straw that breaks the camels back...
Materials Shortages have directly affected the packaging ability of many food suppliers. Your average boxed meal needs plastic bags to protect the contents, seasonings, pasta, cardboard (boxes), professional printing and more just to be ready to be shipping to a grocery store near you. That's only if they are able to ship without logistics issues... Which brings us to the next stop on this waterfall effect.
Shipping and Logistics Problems have created a nightmare scenario for businesses and companies across the globe. A shortage in semi-drivers to haul these loads, and labor shortages in the distribution warehouses are contributing to even further delays. It doesn't take a rocket scientist to see where this is going...
The Texas Freeze contributed to hundreds of millions of dollars in damage for Texas farmers in early 2021. Dante Galeazzi, chief executive of the Texas International Produce Association said this "At this time, it also looks like next years crop will be greatly diminished if we have anything at all." We could be looking at a downward spiral of produce availability through 2022.
Resources: Texas Freeze - https://www.washingtonpost.com/business/2021/02/26/texas-storm-produce-shortage/
Shipping and Logistics - https://www.joc.com/trucking-logistics/labor/us-truck-driver-shortfall-steeper-expected_20201125.html
Materials Shortages - https://www.bloomberg.com/news/articles/2021-05-04/inflation-risk-intensifies-with-supply-shortages-multiplying