Not only have grocery shopping trips become a strong annoying factor for ordinary Americans, they have also recently risen in price for meat, eggs, and even potatoes, as the coronavirus has disrupted the normal operation of processing plants and retail chains.
In general, the cost of food products purchased for domestic consumption has skyrocketed over the past 46 years, and analysts have warned that, for example, meat prices may remain high, as slaughterhouses, although trying to maintain production at a normal level, are forced to take measures aimed at maintaining the health of workers in a pandemic.
Although price spikes for basic foodstuffs, such as eggs and flour, are less and less observed as consumer demand levels out, prices for carrots, potatoes and other products remain unstable due to transportation problems and rising morbidity among workers who are engaged in harvesting and in processing plants.
In short, supermarket buyers and restaurant owners should not expect price cuts any time soon.
“Our biggest concern is the high cost of food in the long run. I think prices will continue to rise, ”said Julie Kalambokidis, co-owner of Adriano's Brick Oven in Glenwood, Iowa.
Tamra Kennedy, who owns a franchise network of fast food businesses in Iowa and Minnesota, said it has now become noticeably more difficult to procure the necessary ingredients.
“You can name any ingredient, and I will tell you that there is a shortage,” she said.
Food prices began to jump in March, when the United States became affected by the coronavirus pandemic.
The Labor Department reports that a 2,6% jump in food prices in April was the largest monthly increase in 46 years. The prices for meat, poultry, fish and eggs increased the most, having increased by 4,3 percent. Although the jump in prices for cereals and bakery products by 2,9% was not so sharp, but, nevertheless, it was the largest increase recorded by the department.
Prices for dairy and related products, as well as fruits and vegetables, rose 1,5 percent in April.
In late March, egg prices also reached a record high of $ 3 per dozen, but have since fallen to less than one dollar per dozen.
The worst situation is with meat prices, mainly due to an increase in the incidence among slaughterhouse workers. An outbreak of coronavirus infection hit pork processing plants the hardest, but beef and poultry processors were also affected, as thousands of workers had coronavirus detected, and the United Food and Trade Union said on COVID-19 as of Friday. 44 workers died.
April retail prices for pork chops and ham were almost 6% higher than in March, while retail prices for hamburger and sirloin steak rose by about 4 percent during this time, the USDA said. Prices for fresh chickens rose by more than 12 percent.
After numerous stops by pork processing enterprises, most of them reopened, but, as a rule, do not work at full capacity, which forces pig farms to euthanize animals whose meat cannot be processed.
“There are biological limitations, and so I expect prices to remain high for at least some time,” said Trey Malone, a specialist in agricultural economics and professor at Michigan State University. “If you are going to euthanize thousands of animals, you need to understand that in order to raise new ones, it will take six months, and it is obvious that there will be some delays and failures in the supply chain.”
By mid-May, slaughterhouses operated at about 60% of full capacity, although since then this figure has grown to almost 90%, says Jason Lask, an economist at Purdue University. Although Lask was optimistic, believing that the worst of the reduction in meat supplies was a thing of the past, he noted that it was quite possible that the second wave of the disease could lead to a worse scenario.
Some jumps in food prices were caused by people stocking up on food when coronavirus first appeared. But even when prices for a number of products fell, the cost of potatoes, onions and carrots remained at a level higher than last year's prices.
It seems that for the most part this growth can be explained by the fact that more and more people began to cook at home.
As for garlic, which is mainly imported from China, the price increase of 278 percent compared with last year is largely due to violations in the supply chain in China.
Jeff Dunn, CEO of Bolthouse Farms, a large supplier of carrots and a distributor of salad dressings and fruit and vegetable drinks, said he did not anticipate new supply problems. But he noted that part of his company’s employees are on sick leave and that additional costs have arisen related to the adoption of measures aimed at ensuring the safety of other employees.
Someone has to bear these costs, he said.
“Across the supply chain, real costs are accumulating. Not only here, but also for retailers in terms of the additional costs associated with COVID, ”said Dunn. “At some point, if you want to have at least some chance to maintain a profit margin, you will have to hang these expenses on someone or somehow compensate them at the expense of state support.”
Although the share of Americans' wages spent on food has declined over the past 50 years, many people are still somehow coping with the recent price increase. But the coronavirus left some 41 million Americans unemployed, and for them, even a slight increase in prices could be alarming.
“We have all seen this record increase in the number of applications for unemployment benefits, and many people are in danger of being out of work and losing the money they need to buy the food they’re used to buying,” said Malone. “For people who are already in a difficult position, this price increase was another blow.”
It was also a tough time for the breeders, who hoped that after several years of decline, they would benefit from new trade deals and a stronger domestic economy.
“It seemed to the farmers that they saw the light at the end of the tunnel,” Lask said. “It turns out it was a spotlight on an approaching train.”