The daily total of Covid cases in the US has now reached 1 million, while stimulus checks have dried up, inflation is soaring, and grocery prices are similarly on the rise. Welcome to 2022, which has yet to offer any indication that it will present a dramatic turnaround from the malaise we’ve now spent some 24 months living through. But, who knows. Maybe fate will surprise us.
At any rate, one of the many areas where recent national headlines and trends continue to trickle down to people’s daily lives is at the grocery store. Specifically, regarding the price of many items on those grocery stores’ shelves. The price of eggs and fish, for example, was reportedly up almost 10 percent last year. While the price of steaks ballooned 25 percent last year, compared to 2020. And because of the persistent inflation problem in the US at the moment? This trend will almost assuredly continue throughout this year.
Grocery prices going up
According to the Bureau of Labor Statistics? Grocery prices for goods in at least a dozen categories were up last year compared to 2020.
Looking ahead, experts are already predicting costs to keep rising in at least half a dozen product categories this year. Let’s start with meats. Specifically, steaks and chicken.
The Biden administration this week blamed soaring prices on meat industry consolidation. Along those lines, per a White House estimate, just four companies control up to 85 percent of the US meatpacking business. They include Tyson, JBS, Marfrig, and Seaboard. When meatpackers’ prices go up, President Biden said at an event on Monday, “the prices you see at the grocery stores go up commensurate.”
We already noted last year’s price increase for steaks. The price of chicken, meanwhile, was up almost 10 percent last year, compared to 2020. In a news release, however, North American Meat Institute CEO Julie Anna Potts accused Biden officials of not understanding how the economy works. Essentially, it’s a supply and demand problem. Demand has exploded, and when that happens? In almost any context, price hikes follow.
“Why the sudden inflation?”
“The Economic Council continues to insist market structure is the reason for higher consumer prices of meat and poultry,” Potts says. “In beef production, for example, the same four firm concentration ratio has been operating in the market for nearly 30 years. Why the sudden inflation?
“The answer is consumer demand for meat and poultry products has never been higher. Members of the Meat Institute are producing more meat than ever before under extraordinary circumstances to keep our farm economy moving and to put food on American’s tables.”
Meanwhile, other product categories that will likely also see a rise soon in their grocery prices include cereal, vegetables, and eggs
Cereal. Per CNN, General Mills notified retail customers that prices are going up this month on hundreds of items. They include everything from Yoplait yogurt to Fruit Roll-Ups, Cheerios, Cinnamon Toast Crunch, Lucky Charm’s, and Trix. Those increases should start showing up over the next two weeks or so.
Will food prices go down in 2022?
This all comes, by the way, as the largest US grocery chain (Kroger) acknowledged in recent days that it’s passing along price increases to customers on certain items.
In an earnings call with analysts just a few days ago, Kroger CFO Gary Millerchip confirmed that the grocery chain is passing along some price increases to consumers (“where it makes sense to do so”). “We are investing where it matters most,” he said. “Using our proprietary data to be strategic in our pricing and personalization with the objective of winning long-term customer loyalty.”
So what else is going up?
Vegetables and eggs. A recent report from Wall Street Journal notes that vegetables are among those products that will be hit with higher prices because of a rise in freight costs. Egg companies, meanwhile, are dealing with their own challenges. “We’ve chosen to increase our prices for the time being,” wrote New Hampshire-based egg company Pete and Gerry’s in a note to customers on its website. “We recognize that this is a difficult time for everyone and higher grocery bills can only contribute to that.” Nevertheless, the note continues, the cost of high-quality organic ingredients for hens’ supplemental feed “has reached an all-time high.”
There will no doubt be other categories to include on this list in the coming weeks. It definitely looks like soaring grocery prices will remain the rule rather than the exception for shoppers. For the time being, that is.