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"A perfect storm": the price of food suffers its biggest rise in 40 years

2022-06-11T14:56:07.375Z


Groceries rose 10.1% for the 12 months ending in May, according to the Bureau of Labor Statistics. It is the first increase of more than 10% recorded since 1981.


By Rob

Wile

Last month, Americans experienced the biggest price increase on their food purchases in 40 years.

This comes amid rising costs for labor and energy services, as well as problems in global supply chains.

In May, the food price index increased by 10.1% compared to the same period last year.

This is the first increase of more than 10% since 1981, the US Bureau of Labor Statistics reported on Friday.

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Food prices increased 11.9% in May.

Within that category, chicken prices rose 17.4%, the largest increase ever recorded.

Pork prices increased 13.3%;

bacon, 15%;

milk, 15.9%;

coffee, 15.3%;

and fruits and vegetables, 8.2%.

Eating out, such as in restaurants, increased by 7.4%.

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What is causing this increase in prices?

According to experts, it is a combination of factors.

Some of the biggest food costs come from worker wages and fuel costs to deliver produce.

Right now, job openings for positions in food processing plants are at an all-time high, which means there are more openings than employers can fill.

As a result, companies have offered higher wages and those costs are passed on to consumers.

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Also, fuel prices are at record levels.

For companies that ship large amounts of food, those costs are even higher because diesel fuel has risen even more than regular gasoline amid a shortage of refining capacity.

Global supply problems caused by the war in Ukraine, a key supplier of grains, as well as drought conditions in important agricultural areas such as the western US, are also exacerbating the situation, explains Christine LaFave Grace, executive editor of Winsight Grocery Business, a publication that monitors the food industry.

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"It's a perfect storm," he said.

When will these persistently high prices begin to decline?

LaFave Grace said food industry analysts have changed their expectations.

"We're hearing more and more that there won't be a significant change until next spring," he said.

"Six months ago, everyone was saying we would go back down to 4% (inflation) by the end of the year. But it looks like that's not going to happen anymore."

Source: telemundo

All news articles on 2022-06-11

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