Food prices keep rising due to inflation. How is CA affected?

Forget about ground chuck at $1.99 a pound for a while. Or $2.99 ​​a pound, for that matter.

Ground beef is currently $3.47 per pound at Albertsons, which has locations and subsidiaries across California, with other options at $5.99 per pound for online shoppers.

There’s little relief in sight.

Increases in the cost of living continue to hit unseen levels in 40 years — the latest reading Wednesday was a 8.3% increase in the last 12 months.

Food prices are going up even faster. They’ve increased 9.4% over the last year.

Nate Rose, senior director of communications for the California Grocers Association, told The Bee that grocery store inflation is expected to continue through the rest of the year. But what prices will look like month to month for different food items at your grocery store is hard to predict.

“Grocery stores are doing everything they can to mitigate this inflation for their shoppers,” Rose said. Considering how competitive the industry is, he said, raising prices will be the last thing they want to do.

He said stores are trying to keep prices down for fresh goods, such as milk, eggs and meat, compared to what they could be with inflation, by analyzing price sensitivity, which is the degree at which prices change a customer’s purchasing decisions.

In combination with food price inflation and food insecurity as a result of the COVID-19 pandemic, people across California are still seeking resources from food banks, said Becky Silva, government relations director at the California Association of Food Banks.

“A lot of our food banks are still reporting that they’re seeing one and a half to three times the number of people coming to their distribution sites than before the pandemic,” Silva said.

With inflation prices at the supermarket, food banks are having trouble stocking their sites.

“A lot of food banks have told us that they’re paying, sometimes, even double what they used to pay for a dozen eggs,” Silva said, adding that some sites have used a disproportionate share of their annual funding for food purchases in just the first few months of the year.

Can food prices be lowered?

There’s just no easy way to bring down food prices.

“The forces driving overall inflation are having an impact on food,” said Joseph Glauber, senior research fellow at the International Food Policy Research Institute, as the rising costs of energy, labor and other items help push food prices higher.

The price of a commodity, he said, is a small part of the price of food. The other factors, including marketing cost and supply and demand, are also important components.

While the Agriculture Department’s Economic Research Service sees the slowing somewhat, it still predicts prices of food eaten at home will go up 5 to 6% in 2022. Prices were up 3.5% in both 2020 and 2021.

Glauber, former chief economist at the agriculture department, also saw food prices up about 5% this year. But, he warned, “tell me what oil prices are going to do, and I’ll tell you what inflation is going to do.”

Food prices, like that of any product, are largely driven by supply and demand. Supplies for some products are somewhat less than needed at the moment while demand is strong — a recipe for higher prices, Lee Schulz, associate professor of economics at Iowa State University, told The Bee.

Rising beef prices

Beef and veal prices nationally are up 1.4.3% over the last year, according to the federal Bureau of Labor Statistics.

“After a year of pandemic-related lifestyle disruptions, people were busting at the seams for some normalcy and needed to celebrate. Beef is a celebration food,” Schulz wrote last month in Wallace Farmers, an agricultural publication.

Other meats and poultry prices also went up. Sliced ​​bacon averaged $7.20 a pound in March, and $5.85 a year ago, according to federal government data.

Boneless breast of chicken was $3.87 a pound in March, up from $3.29 a year earlier and $2.95 two years earlier.

Price increases for meats have several sources. Jayson Lusk, head of the agricultural economics department at Purdue University, wrote in November that the meat price jumps were “initially caused by disruptions in supply when packing plants shuttered after workers contracted COVID19. “

While packing resumed, extra costs remained because of social distance workers and the need for personal protective equipment. And labor and feed costs remain up.

Wheat prices are up

Also in play: Grain price changes that ripple through the food economy. The agricultural economist noted that grain price changes can affect the price of meats, poultry, eggs and dairy products, and to some extent, cereals and bakery products.

“Because these items account for more than half of the at-home food dollar, price changes for these categories can significantly affect the Consumer Price Index (CPI) for food at home,” the Economic Research Service says.

Wheat prices have been especially volatile this year. Part of the reason is the war in Ukraine, which produces about 3% of the world’s wheat.

Wheat this week was selling for an historically high $11 a bushel, up from $4.65 three years ago.

Aaron Smith, professor of agricultural economics at the University of California, Davis, wrote on his website recently that “The increase in wheat prices will not cause massive increases in the price of American bread. Most of the price of food is determined by the cost of processing, packaging and marketing.”

But cereal and bakery prices should go up 6% to 7% this year, the agriculture department predicted. In the last 12 months, breakfast cereal prices were up 12.1%. Bread was up 9.1%.

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David Lightman is McClatchy’s chief congressional correspondent. He’s been writing, editing and teaching for nearly 50 years, with stops in Hagerstown, Riverside, Calif., Annapolis, Baltimore and since 1981, Washington.

Hanh Truong is a reporter on The Sacramento Bee’s utility desk. She was previously a freelance journalist, covering education and culture for PBS SoCal and music for buzzbands.la.

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