The rising cost of groceries is weighing on consumers, with food prices jumping nearly 9% in March from a year ago.
All American households suffer from inflation, but the costs disproportionately hit middle-class and low-income families.
Food prices related specifically to home food preparation, which hit middle-class and lower-income households the most, have soared 10% a year, a sharp rise that has caught the attention of U.S. food sellers.
“Everything is in place. It’s not just the produce, we see it in chicken, eggs, meat. The milk was up this month, but come see the steak,” said in an interview an official of the New York grocery chain Union Market, who asked not to be named so as not to have d trouble with his supervisors.
“Look, we just had to mark this one a dollar more, this one two dollars more,” the manager said, pointing to different cuts of steak in the chilled glass display case, including flank, skirt and ribeye.
Since last year, prices for meat and fish have increased by 13.4%, cereals and bakery products by 9.4%, dairy products by 7% and fruits and vegetables by 8.5%. %, according to data from the US Department of Labor’s Bureau of Labor Statistics.
Headline inflation, as measured by the consumer price index, is also up 8.5%, an annual increase that continues recent trends not seen since the early 1980s.
New York grocer Zan Zan Lwin, an employee of K&Y Fruit and Veggie, said she pays close attention to the price of limes. It used to be three, four, or five for a dollar, and now they’re ninety-nine cents apiece. Customers are surprised at how expensive they are,” she said.
According to a recent analysis of buying trends by grocery trade group IMF, consumer demand for groceries has not slowed despite price increases.
“Average household food expenditure has recently held steady at around $148 per week. While this is down from the peak spending of $161 at the height of the pandemic, it is still significantly higher than the pre-pandemic average of $113.50 when inflation was much lower,” said IMF analysis.
Inflation is now top of mind for grocery shoppers, with more than half noticing rising prices for their favorite foods, the IMF report continues. Worry varies by income level and is highest among those earning less than $75,000 a year, with women more likely than men to be concerned about prices.
To cope with rising prices, many buyers are looking for deals, according to IMF. Low-income shoppers are likely to change what they buy, such as switching from fresh meats to frozen meats.
Grocers are also facing issues that are contributing to soaring wholesale prices. Logistical bottlenecks exacerbated by the coronavirus pandemic remain a cause, but it is not the only factor.
“Distributors say different things,” said Murat Sonkaya, who works for a fruit and vegetable stand in Brooklyn that sources grapes from Peru and garlic from China, among other imports. “They say it’s the cost of shipping gasoline, they say it’s the shortage. With lawyers from Mexico, it’s cartel issues, so it’s different. »
The situation in the United States is consistent with the price increases occurring around the world.
The Food and Agriculture Organization of the United Nations (FAO) recorded a 12.6% jump from February in its benchmark food price index, reaching its highest level since the first data from record in 2009. The new level represents all-time highs for vegetable oils, grains and meats, with big increases for sugar and dairy as well.
The FAO Cereal Price Index jumped 17.1% from February, reflecting “a surge in world wheat and coarse grain prices, largely driven by disruptions in conflict-related exports from Ukraine and, to a lesser extent, the Russian Federation,” FAO said.
“The expected loss of exports from the Black Sea region has exacerbated the already tight global availability of wheat. With concerns over crop conditions in the United States of America also adding support, global wheat prices rose sharply in March, climbing 19.7%,” the FAO said.
According to the Federal Reserve Bank of New York’s March survey of consumer expectations, more and more Americans feel worse about their financial situation, with 40% of respondents saying they feel much more or slightly less badly off, compared to 34% the previous month.