In the year ending March, unadjusted for seasonal fluctuations, food prices rose 8.8% – the largest 12-month increase since the year ended May 1981, the Bureau of Labor Statistics.
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Over the past year, virtually every type of food has become more expensive.
Overall, groceries have become 10% more expensive. Flour jumped 14.2%, milk 13.3%, eggs 11.2% and fruit and vegetables 8.5%. Bacon increased by 18.2%.
A number of factors tightened food supplies in several categories as demand remained strong, leading to price spikes across the board.
One problem is environmental. Droughts in Brazil, the United States and Canada have impacted crops from coffee to soybeans to wheat, said William Osnato, principal research analyst at Gro Intelligence, a data analytics firm agricultural.
The war in Ukraine disrupted the wheat market, causing prices to soar. Additionally, supply issues are also impacting the global vegetable oil market. A deadly bird flu is reducing egg supply and driving up wholesale egg prices, while threatening consumer prices.
It will take some time before prices come back down, Osnato noted.
“We’re not about to get away with a good American crop,” he said. “It won’t solve anything. We’re going to be in a high food price environment for over a year.”
Not all groceries became more expensive last month. But many have.
Many shelf-stable products saw big jumps from February to March, according to seasonally adjusted BLS data. The price of canned vegetables jumped 4.2%, while the dried beans, peas and lentils category rose 4.4%. Rice became 3.2% more expensive, and crackers and bread increased by 2.7%.
Fresh staples have also become more expensive. Uncooked ground beef jumped 2.1%. Milk increased by 1.3%. Fresh vegetables increased by 2.6%.
But the biggest leap? Butter, with a 6% increase.
“Global milk supply over the past six months or so has contracted significantly,” said Rob Fox, director of the knowledge exchange division at CoBank, which provides financial services to agribusiness. industry.
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In the United States, “milk production forecast for 2022 is 226.0 billion pounds, down 1.2 billion from last month’s forecast and a forecast decline of 0.3 billion pounds from 2021,” according to the USDA Dairy Outlook released last month. “This would be the first year-on-year decline in milk production since 2009.”
But why did butter rise 6% in March, while milk only rose 1.3%?
Fox explained that when the milk supply is tight and demand for milk is up or flat, butter is the first thing to be hit. This is because it is a relatively small part of the dairy market. “That can have significant price volatility,” Fox said, noting that spikes in butter prices mean other dairy products could become more expensive as well.
A few items have become cheaper in the last month. Donut prices fell 1.7%, peanut butter became 1.5% cheaper, and ham prices fell 1.2%.