Food prices rising: real or contrived?

We’ve all been feeling it, one way or another. Shop at your favorite food market and you see prices going thru the roof. The FDA is predicting grocery prices will continue to rise for the foreseeable future. I have heard all the excuses, supply chain issues. But what’s for real and what is not? I cannot help but believe a contributor to this problem is good old-fashioned greed in the marketplace. What do you think?

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Everything in the damn stores are now $5 and up. Insane! The only time I notice something is under the $5 mark is when it’s a store brand item.

I’m in Los Angeles.

Takes fuel to transport foodstuffs also. And fuel prices are way up too, so there’s that…

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Supply chain issues. In some cases (Italian pasta) crop failures. Many businesses are having to offer higher wages to get workers.

One of these days I’ll dig up some pre-pandemic receipts and get some hard numbers on the stuff I buy regularly.

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just saw something on this on NPR saying food prices are projected to go up another 5 or 6 % this year

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Transport (gas prices) and staffing issues (especially at packing houses) The prices for certain items have been higher since the pandemic started. Especially meat items.

And they continue to rise up and up… My Cousin mostly does online pick up and recently put a bag of Chicken wings in her cart and noticed the price which she thought was high… then she went back in her order history and saw what she paid last year for the same exact bag. It was nearly double.

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Sweetgreen has been out of stuff as basic as romaine (which is pretty important for a salad place…), so I don’t think it’s contrived. They are also often out of avocado (no surprise) and fish.

Chicken wing prices went up so much before the pandemic that wing places started using other parts. Prices have been volatile.

My kids love chicken wings. Prices at our normal places are up significantly. We don’t get them much anymore.

That WSJ article is from 2013.

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While all this is going on we are hearing reports about giant profits for the large food companies. How do you justify that?

Not sure if this might explain some of that gap?

No. Interesting, but not relevant to recent inflation.

Now egg prices are jumping thru the roof…

I just bought a dozen organic at Target for $4, which is cheaper than I’ve seen them in years. At my usual grocery store they’re over $6.

Ham & head cheese banh mi at my usual place, Ba Le in El Cerrito:

3/10: $2.25
12/13: $2.75
9/14:$3.00
9/19: $300
9/20: $4.00
4/22: $5.00

Still great and a good value.

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Greed. Capitalizing on “inflation” and job and food shortages.

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Right. No reason except greed.

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All those things can be true and people can still be greedy too. I bet when those things stop happening prices will not go down.

Part is corporate greed. But a lot of it is global markets and higher input costs. I’ll give just a couple examples.

Front month natural gas in the US is up about 200% y/y. Natural gas is an input in fertilizer manufacturing. Look at what that has done to fertilizer prices recently, up about 100% y/y, ~150% since 2020, in the US. And globally this is much worse since natural gas prices are higher than in the US, and there is no end in sight given the disruptions due to Ukraine being invaded. Fertilizer is a direct input into everything food and ag related…crops, animal feed, etc… This is a US fertilizer index from the US BLS:

And an LA Times article from a couple days ago I just found speaking to this: Russia's war in Ukraine worsens fertilizer shortage, risking world food supplies

Another example, grains. Prices globally have soared due to Ukraine. Ukraine is a huge producer and exporter, and obviously they are unable to send shipments even though they had a great crop last year and have tons in storage. This has a huge domino effect worldwide, not just on flour and bread, but on animal feed, which then raises animal prices (animals are a commodity that are traded on exchanges).

And, let’s add to this the fact that the US winter wheat crop is the worst in 20 years:

Out of curiosity, I looked at the price of the flour, mozzarella, and tomatoes I used when I was in business. In 1 year, the prices of each of those items has gone up roughly 30-40%. From 3 years ago, the same case of CA tomatoes, and mozzarella produced in WI, is up 70-80%.

There is a lot more hurt coming

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