Page Contents
The real reason behind rising food costs
Have you noticed a steady increase in your grocery bill? You’re not alone. Food prices are skyrocketing, and it’s important to understand the reasons behind this phenomenon. In this article, we will explore the factors that contribute to the rising cost of various food items.
Avocado: Demand, Supply and Trade
Avocados have gained tremendous popularity in recent years due to their delicious taste and numerous health benefits. However, their prices have been steadily increasing. According to CNN Money, in September 2017, avocado prices reached their highest point since 1999, increasing 31 percent since the beginning of the year.
Several factors contribute to the rising cost of avocados. First, there has been a significant decline in the size of the avocado crop, which is down 44 percent from 2016, according to the California Avocado Commission. In addition, uncertainty over trade between Mexico and the United States, where many avocados are imported from, has led to potential tariffs and higher costs at grocery stores.
Chicken and chicken wings: A surge in demand
The price of chicken, particularly chicken wings, has increased significantly in recent years. Restaurants faced a 60 percent increase in the price of chicken wings in July 2017, which had a noticeable impact on their profitability. The surge in demand for chicken wings, driven by popular establishments such as pizzerias and bars, has played a major role in driving up prices.
In addition, the overall price of chicken has increased. Chicken farmers have reported lower hatch rates and reproductive difficulties due to breeding for top-heavy and more profitable birds. Aging breeding flocks also contribute to the rising cost of chicken.
Beer: Hops, Craft Breweries and Trade Policy
If you enjoy a cold beer after a long day, you may have noticed the rising cost of your favorite brew. The price of hops, a key ingredient in beer production, jumped 60 percent in the first half of 2017. Craft breweries have been particularly affected by this increase, raising concerns that smaller companies could be forced out of business.
Trade policies, such as President Trump’s focus on supporting the metal manufacturing industry in the United States, have the potential to further increase costs. Import taxes on aluminum, which many brewers rely on, could result in higher prices for consumers.
Wheat: Weather conditions and global impact
Wheat is a key ingredient in several food products, and its price increase has far-reaching implications. Adverse weather conditions, including torrential rains, flooding, frost, and freezes, have affected wheat crops in the United States, Canada, and the Black Sea region.
Uncertain weather patterns and crop failures have led to a limited supply of wheat, resulting in higher prices. These price increases are affecting a wide range of popular foods that rely on wheat as a key ingredient.
Cheese: Market Fluctuations and Increased Demand
The price of cheese can fluctuate rapidly due to a number of factors. Daily fluctuations in the price of cheese sold on the Chicago Mercantile Exchange affect suppliers’ pricing strategies, which can affect consumer prices.
In addition to market fluctuations, increased demand for dairy products and specific types of cheese has put pressure on dairy farmers. Factors such as listeria outbreaks, new plant openings and supply issues can also affect cheese prices and result in higher costs for consumers.
Eggs: Animal welfare and disease outbreaks
Efforts to improve the welfare of egg-laying hens, such as the transition to cage-free, have had a significant impact on the egg industry. Many companies have committed to sourcing eggs only from cage-free farms, resulting in the need for industry-wide changes.
Not only in the United States, but also in major European egg-producing countries, factors such as outbreaks of avian influenza have affected egg prices. Increased demand for eggs perceived as a more responsible source of protein has also contributed to rising prices.
Butter and bakery products: Changing consumption patterns and dairy production
Butter consumption has reached record highs, driven by trends such as brown butter cocktails and butter coffee. However, there is a shortage of storage facilities for excess milk, resulting in limited supply and higher butter prices.
In Europe, dairy production has declined due to several challenges facing the industry. The shortage of butter is affecting the price of pastries and baked goods, as butter is a key ingredient in these products.
Oranges and orange juice: Hurricanes and Crop Destruction
The destructive impact of hurricanes on Florida crops, a major producer of oranges and orange juice, has led to increased prices for these citrus products. Hurricanes can cause significant damage to orchards and disrupt the supply chain, resulting in reduced yields and higher costs.
In addition, diseases such as citrus greening have affected orange trees, reducing production and further exacerbating the supply shortage.
Bottom line
Rising food costs are influenced by a complex interplay of factors, including supply and demand dynamics, trade policies, weather conditions, and industry-specific challenges. Understanding these drivers can help consumers make informed choices and adapt to changing food prices.
While it is difficult to control external factors that affect food prices, individuals can mitigate the impact by exploring alternative options such as buying local or seasonal produce, practicing meal planning, and diversifying their diets. By staying informed and resourceful, consumers can navigate the ever-changing landscape of food costs and make choices that fit their preferences and budgets.
FAQS
Why have avocado prices gone up?
Avocado prices have risen due to a decrease in the size of the avocado crop and trade uncertainties between Mexico and the United States, where many avocados are imported.
What is driving up the price of chicken and chicken wings?
The surge in demand for chicken wings, driven by popular establishments such as pizza parlors and bars, has contributed to the increase in prices. In addition, breeding challenges and aging flocks have impacted chicken production costs.
Why are craft brewers facing higher beer costs?
Craft brewers have been impacted by the rising cost of hops, a key ingredient in beer production. Increased demand and potential trade policies, such as import taxes on aluminum, have further impacted beer prices.
How have weather conditions affected wheat prices?
Adverse weather conditions, including heavy rains, flooding, frost and freezes, have led to crop failures and limited wheat supplies. This has resulted in higher wheat prices, affecting various food products that rely on wheat as a key ingredient.
What factors contribute to the volatility of cheese prices?
Cheese prices can fluctuate due to market fluctuations and factors such as listeria outbreaks, new plant openings and supply issues. Increased demand for dairy products and specific types of cheese also play a role in price fluctuations.
Why are egg prices rising?
Efforts to improve the welfare of egg-laying hens and disease outbreaks such as avian influenza have impacted the egg industry. Increased demand for responsibly sourced eggs has also contributed to rising prices.