Soaring Grocery Prices: The Biggest Monthly Cost Jumps and What You Can Do To Save Money
Unless you live off the grid or under a rock, you know that food prices have gone way up and show no signs of receding back to normal. We are amid a historic period of food cost inflation, and the future food price outlook isn’t especially promising.
The average price of groceries is likely to rise 3% to 4% by the end of 2022, according to new estimates from the U.S. Department of Agriculture. Not counting seasonal fluctuations, the year ending in March saw food prices climb 8.8% — the biggest 12-month hike since May 1981, according to the Bureau of Labor Statistics. Likewise, the U.S. inflation rate accelerated to 8.5% in March — up from 7.9% in February and the highest since December 1981.
Grocery shopping isn’t giving consumers the warm fuzzies lately. Inflation, supply chain issues and the war in Ukraine have had a substantial impact on all commodities. But they aren’t the only factors influencing the price of some food items.
Over the course of the past month, between 17 and 20 million turkeys and chickens in the U.S. have been infected with the highly pathogenic avian influenza (HPAI), or bird flu, and consequently, the virus has affected egg supply and wholesale and consumer egg prices.
Environmental problems have had an impact, as well. Droughts in Brazil, Canada and the United States have done heavy damage to numerous crops like coffee, soy and wheat.
All of this has means we are seeing unprecedented jumps in food prices. According to a Bureau of Labor Statistics report on Apr. 12, nearly every type of food has become more expensive. Over the last year, groceries in general got 10% more expensive, as did many staples like flour (14.2%), milk (13.3%), eggs (11.2%) and fruits and vegetables (8.5%).
Canned vegetables went up 4.2%, rice jumped 3.2%, crackers and bread got 2.7% more expensive and dried beans, peas and lentils increased by 4.4%. Fresher items like ground beef rose 2.1% and fresh vegetables jumped 2.6%.
Cost soaring factors plus a volatile world economy have analysts explaining price anomalies to consumers. For example, the biggest monthly increase in price has been butter at 6%. Why would one item jump so much while another in the same food category, such as milk, increases by just 1.3%?
Rob Fox, a knowledge exchange director at financial services provider CoBank, claimed that because butter makes up a relatively small part of the dairy market, it is the first to get hit with a large price change when demand for milk, a very large part of the dairy market, is high.
Although almost all food increased in price, there were a small number of anomalies. Ham (down 1.2%), peanut butter (-1.5%) and donuts (-1.7%) became cheaper last month.
There are a few ways to pinch pennies with rising food prices. You can start with the items that saw price decreases last month. However, since you can’t survive on donuts and peanut butter (as much as you might like to), it’s more realistic to make (and stick to) a list, use coupons or join a store loyalty program. Switching to more store brand items, shopping earlier in the day (when there’s more variety) and doing more price comparison at stores are other great ways to rein in your spending.
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