Why Are Food Prices Rising? Here’s Everything You Need to Know.
As the cost of butter, bread, coffee, and even hot dogs goes up, here's how to save money on your grocery bill.
Whether the cause is the pandemic, the war in Ukraine, inflation or all of the above, you’ve definitely noticed that food prices are going up. And not just fancy or gourmet food, but fast food and everyday staples. It’s a challenge for many Americans who grocery shop on a budget. Even if some states are cutting their grocery tax to try and ease the burden.
According to CNBC, the price of butter is up more than 24 percent and flour has risen nearly 25 percent, while bread and rice are up around 16 percent. The price of coffee, hot dogs, and lunch meat have all also risen more than 18 percent. You’re likely already feeling the crunch, especially with the food shortages like recent egg shortages that have been the norm for much of the last couple of years. Plus, a new phenomenon of tipflation has continued to rise.
Many of us know that overall inflation has reached 40-year highs, rising over 8 percent. But the increase in food prices is even steeper. According to the USDA’s Consumer Price Index, average food prices are up more than 11 percent since August 2021. Grocery store or supermarket purchase prices are up 13.5 percent, and restaurant bills are up 8 percent since last summer. This all combined certainly takes a toll on the monthly budget.
Why Are Food Prices Rising?
For basics like butter and milk, it’s a basic supply chain issue in the dairy industry. The cost of feed is increasing, there’s an ongoing labor shortage, and the cost of maintaining cows is more expensive than ever for farmers. The USDA reported in early 2022 that milk production was down 1.4 percent, which didn’t help matters. Experts say high prices of butter and milk are not going to come down any time soon, and a butter shortage is likely.
The same supply chain issues like the ones facing the dairy industry are affecting nearly every other food category. A tomato shortage is predicted as well, so we’re starting to prep to stretch our grocery budget.
Tips for Dealing with Rising Food Prices
Choose what—and where—to buy more carefully
Basic food purchases are not discretionary, and so these price hikes are causing major shifts in how families shop and their eating habits. Many are saving money by buying food in bulk at stores like Costco, Sam’s Club or BJ’s, avoiding red meat and other more costly items, eating less takeout or switching to casual restaurants. These budget-friendly restaurant copycat recipes can help you save at home.
Look out for “shrinkflation” and “skimpflation”
Many large national brands have already raised their prices on food and beverages. But more subtly, to trim costs, they’ve also made their packaging smaller in weight and size in what the industry calls “shrinkflation.” Shrinkflation is otherwise known as “getting less for the same price” and in surveys, more than two-thirds of consumers are worried about the phenomenon. Even sneakier, some companies swap in less expensive ingredients and charge the same price, a practice called “skimpflation.” Keep an eye out for grocery store items with the highest markups.
Meal planning is key to saving money
Meal planning in advance is one of the best ways to save money. Planning helps avoid impulse purchases, but meal planning also helps save time on cooking during a busy week. Meal planning tips such as roasting a whole chicken for the week to use in various meals, or making a casserole, lasagna, or soup and storing ahead in the fridge or freezer, are ways to manage costs. Schedule a “meal-prep Sunday” to ensure delicious, budget-friendly meals in advance of your busy week.