While inflation data shows prices slowing from recent highs, grocery costs remain a top concern for many Americans who are still feeling pain at the checkout aisle.
Food prices have risen significantly over the past three years, with eggs up 52.6% and milk 13.2% higher on average.
Supply chain disruptions from the pandemic and events like avian flu outbreaks have impacted food production and costs.
Rising costs of feed, labor, transportation and packaging are also passed on to consumers.
“Inflation has dropped from 9% to 3% – the lowest in the world. And trending lower,” he said.
“The prices of some things will decline. Others will go up. But we don’t expect to see a decline in the overall price level. That doesn’t tend to happen in economies, except in very negative circumstances,” Federal Reserve Chair Jerome Powell said. “If you think about the basic necessities, things like bread and milk and eggs and meats of various kinds, if you look back, prices are substantially higher than they were before the pandemic.”
Dairy and egg producers say prices may stabilize as supply recovers but are subject to market forces.
“I think consumers have probably noticed a little bit of a roller-coaster ride on egg prices over the last year, and that’s due to a number of factors,” said Emily Metz, president and CEO of the American Egg Board.
“We just had fewer chickens producing eggs. And so, you know, supply and demand. We struggle with that a little bit. Our farmers dealt with that as well as they could,” Metz said.
“As I’m sure a lot of folks know, a lot of other things besides food are just more expensive right now. And so, packaging the feed that our chickens eat, labor to work on our farms and care for our chickens, all of that is more expensive,” Metz said. “Those costs can have an impact on the final cost of eggs.”
“If you do that math of what two eggs for a meal would be, you’re under 40 cents,” Metz said.
As of January 2024, the price has climbed 13.2% to $3.96 per gallon.
“Dairy was a little bit late in experiencing retail price inflation compared to other items,” said Peter Vitaliano, chief economist for the National Milk Producers Federation.
“Supermarkets are very reluctant to change their prices when their costs go up, but when they go up a certain amount they have to raise them. And when they do that, they have a tendency to hang on to those higher prices, even if the cost of their food comes down,” Vitaliano said.
“But milk is a pretty competitive business. They can’t hold it up forever. So there’s a combination of retailers trying to hold on to some of that higher price, but probably more importantly, the farm-to-retail part of milk in this case has gone up because of general inflation.”
“The dynamics of what’s happened to feed prices have had a big impact on the price farmers pay, and that price feeds into what the fluid milk processors pay,” Vitaliano said.
Biden condemned companies for raising “their prices to pad their profits charging you more and more for less and less.”
“That’s why we’re cracking down on corporations that engage in price gouging or deceptive pricing from food to health care to housing,” he said.
High inflation overall continues to pressure farm costs and grocery prices, keeping food expenses a burden for American households.
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