Food Inflation Is Far From Over, Industry Executives Warn

People shop at a grocery store in New York City on May 31, 2022. Samira Bouaou/The Epoch Times

The soaring cost of food won’t be declining anytime soon, driven by increased production costs, extreme weather conditions, and disease, industry executives have warned.

Food inflation in August rose 12.4 percent year-over-year, marking the biggest hike since February 1979, according to government data.

Meanwhile, the food at home index, or food at grocery stores, rose 13.5 percent over the last 12 months, the largest 12-month increase since the period ending March 1979.

In January 2021 when President Joe Biden took office, annual food inflation was at 3.8 percent.

While American consumers may see retail prices stabilize overall, they likely won’t see prices drop in the near future as producers are forking out more for labor and packaging materials while battling droughts, flooding, and diseases like avian flu, which have impacted crops and killed egg-laying hens.

KK Davey, president of client engagement at market research company IRI, told ABC7 that the firm expects food inflation to rise between 5 and 10 percent next year as producers battle with “labor and commodities costs.”

Elsewhere, U.S. multinational manufacturer General Mills, which makes everything from cereals to pizzas, expects its production costs to increase by 14 to 15 percent in the 2023 fiscal year, led by the rising cost of ingredients such as nuts, fruits, and flavors.

General Mills said it’s planning further price hikes for its customers.

Even if these issues stabilize, consumers will likely not see price drops anytime soon. Historically, price increases tend to stay put after reaching a certain level as opposed to dropping back down.

Americans Changing Eating Habits As Prices Soar

“There’s a lot of uncertainty,” David Ortega, food economist and associate professor at Michigan State University, told ABC7. “That’s one of the reasons why prices take longer to come down.”

The latest comments from industry experts come after an August poll by Rasmussen Reports found that a growing number of Americans believe their grocery bills will increase in the future.

The survey of 1,000 U.S. adults was conducted between July 24–25, and the margin of sampling error was +3 percentage points at a 95 percent level of confidence.

It found that 89 percent of respondents said they’re paying more for groceries now than they were a year ago, marking an increase from 87 percent in April, while 61 percent said they expect to pay more for groceries a year from now.

Meanwhile, 63 percent of respondents said they have changed their eating habits because of increasing food costs, up from 55 percent in April.

Despite the rising prices, demand for groceries is still high, meaning that companies are able to pass the higher costs onto consumers.

At the end of September, the Biden administration unveiled a new plan aimed at ending hunger and increasing healthy eating in the United States by the end of the decade.

Under the $8 billion plan, at least $2.5 billion will be invested in start-up companies that are “pioneering solutions to hunger and food insecurity,” according to the White House, while over $4 billion will go toward “philanthropy that improves access to nutritious food, promotes healthy choices, and increases physical activity.”

Some of the largest corporations in the United States including Google, Tyson Foods, and Walgreens, have pledged investments in the plan.