Why is Our Food Getting More Expensive in Grocery Stores?

As many of you know, I’m a big advocate of farm-to-table food. There’s a million and one reasons to support your local farmers, producers and artisans. But this article is really about food inflation.

Yes, inflation. The scariest word in the news right now. It’s a crisis!

Prices at the grocery store have risen steadily in the last five years. It’s normal for prices to go up over time. However, as supermarket prices skyrocketed in the last year, the price of locally made goods has basically stayed the same. Why is that?

The answer to the grocery store inflation crisis is deep and complex. There are many layers to this conversation, layers like an onion. They all are working together to make one big smelly thing. Climate change, rising energy costs, supply chain malfunctions, labor issues, a global pandemic. It’s a lot to take in.

Inflation has also had a huge impact on food-insecure communities, forcing some people to make a decision between heating their home or buying dinner. This is nothing new in the United States. However, the COVID-19 pandemic ripped off the Band Aid that allowed many Americans to turn a blind eye.

Let’s start peeling away the layers of this onion. Let’s make something great out of this inflation ordeal. Turn a negative into a positive.

Spoiler Alert: My idea is to support local farmers, producers and artisans. I’m not saying avoid grocery stores like the plaque. That’s just not realistic. After all, you need to buy everyday basics like salt from somewhere, right? Just be mindful of where your dollar is going at the end of the day.

I live by the motto “Don’t buy food from strangers” and “Shake the hand that feeds you”. Those words ring true now more than ever. It’s important to shop locally and support our small businesses. It might even save you a little money.

How does inflation impact the food supply chain?

There are two sides to every coin. We need to address how inflation happens at the manufacturer and grocery store level as well as how it affects them and, ultimately, us. Food manufacturers have three options to weather inflation:

1. They can absorb increased costs, which is not the smartest business decision long term.
2. They can pass the buck, as I like to say. That means passing the cost to produce goods onto the grocery store, which in turn passes it on to consumers.
3. The most clever and sneaky tactic is reducing package sizes while keeping the same price. This is known as “shrinkflation”. It’s a slight-of-hand trick that is effective. Consumers are more likely to have sticker shock when they see a price change. They are less likely to notice slightly smaller packaging. Many shoppers pay attention to dollars, not ounces. Buyers continue to buy, and food manufacturers save money in turn. It’s easy to let this one slip unnoticed.

The more hands involved in getting food to your table, the more likely cost will go up. Local farmers and producers often work on a smaller scale. Many handle the responsibility of growing, packing and retailing products themselves. This is one of the reasons prices at the farmers market haven’t risen as sharply.

Many items at the farmers market are also sold consistently by weight or volume. If the product size decreases, the price usually reflects that. Two pounds of tomatoes, costs two pounds of tomatoes. A pint a strawberries is always going to be a pint of strawberries. A bunch of parsley, it doesn’t matter how big or small, you’re going to pay by weight. Their prices in correlation to weight/size hasn’t changed much during the pandemic. They can’t trick you with shrinkflation.

Climate change

Let’s talk about the weather and how it affects global food prices. It’s a great ice breaker. Rather, it’s like a perfect storm!

Disclaimer: If you’re offended by me mentioning climate change as a real thing, no problemo. You do you. Just go ahead and skip on down to the sections below to see how they affect the price of your food. Those topics will more than tickle your fancy and explain how food inflation is putting a dent in your wallet. 

Much of the recent supermarket price hikes are caused by global supply chain issues. With that said, Mother Nature has also not been working in our favor. Well, if you want to get down to the nitty gritty of it, we haven’t been working in favor of Mother Nature. Adverse weather in major production zones like Argentina, Brazil and California, as well as heavy rainfall in parts of Europe and China, has slowed production and made it difficult to put food on the dinner table at an affordable price.

Climate change affects so much in the food production system. Agriculture and livestock don’t thrive in natural disasters such as floods and droughts. It’s so serious that the U.N. Intergovernmental Panel On Climate Change issued Code Red Warnings for Humanity in August 2021. The report lays out that if we don’t take action to stop climate change, global food production will continue to struggle.

When nations can’t produce food at their regular rate due to natural disasters, they are left to do what they need to do to survive. And that means they raise the prices of the goods they are able to produce and export.

Climate change isn’t just a problem for foreign nations. It’s happening right here in the United States. Wild fires are the hot new thing in California, unfortunately. That may sound tongue in cheek, but it’s a serious matter. The fires have destroyed farms, property and wildlife out west. In 2018, 106 people died as a result of the flames. As if that weren’t devastating enough, the blazes are only making climate change worse.

How do we get ahead of climate change? First off, it’s important to acknowledge that climate change isn’t just a future problem. It’s here now. Some places have managed to adapt to climate change. Adaptation is one thing, but reversing climate change is another. We need to be adapting and reversing at the same time. I don’t have all the answers to how to do this. I’m just a chef. Alas, I am a chef with an opinion (like many chefs) and I do have some ideas. Our actions today affect our lives tomorrow.

Composting

Here is one way to combat climate change. Start composting. And promote it. Danes are leading the way in creating a greener planet. When I lived and worked in Copenhagen, composting was the thing. It was as easy as throwing your food and yard waste into the compost bin. Composting reduces the amount of stuff in giant landfills, which produce tons of methane gas that harm the environment.

Composting also promotes regenerative agriculture. It can be turned into fertilizer that is sold to farmers who use it to grow more food. Waste not, want not.

If you care about the future of this planet, then you should know that food (and how it grows) has a huge environmental impact. It’s no secret that industrial agriculture contributes to global climate change. It degrades the soil and burns fossil fuels, causing millions of tons of carbon dioxide to be released instead of captured and stored. Carbon is not a bad thing if you store and reuse it instead of burning it. It’s when it’s burned and released into the atmosphere as carbon dioxide that it becomes a problem. If we can harness carbon, it can help save the planet and keep food prices down.

This is where regenerative agriculture comes into play. Practiced by many local farmers, it has the potential to slow and even reverse climate change, preserve soil health for future farmers and protect the global environment. Regenerative agriculture has the potential to reduce natural disasters and put food on your table without your wallet being so empty all the time.

Supermarket chains are good in that they make food accessible to masses of people. It makes sense, people need to eat and they have plenty of food. They focus on industrial agriculture because, historically, it costs them less. That savings, theoretically, passes on to the consumer. This year, the rubber has met the road on that ideology.

Many small, independent farmers work off the model of regenerative agriculture. It’s the lifeblood for the sustainability and longevity of their business. They adapt and reverse climate change with everything they grow.

Transportation & the supply chain

The pandemic opened up a can (or shipping container) of worms in the global supply chain. You’ve probably experienced some sort of delay in items getting to you. Lumber, microchips, shipping containers are just a few sectors that have been impacted. But, food! The thing everyone needs to survive was hit really hard.

The global food supply chain relies on many factors. The most obvious one is transporting your food from farms to factories and grocery stores. Gas prices have risen (a juicy subject, but I digress), yet it’s more than a point A to point B problem.

The cost of feeding and keeping animals hydrated has increased. This affects profits as well as keeping the animals alive. Notice how I said profits first, before mentioning the animals’ wellbeing. In some shape or form, this affects a lot of the food sold at supermarket chains.

Commercial dairy farmers and ranchers rely on soybean, wheat and corn producers to feed their livestock. It’s cheaper and easier than feeding them grass or quality feed. Let’s stick with corn to see how transportation affects your pocketbook when you go grocery shopping.

Here is an example. The cost of Iowa corn has risen. That corn is shipped all over the country to feed hordes of livestock that becomes mass-produced meat and dairy products for grocery stores. When the cost of corn increases on one end of the scale, the other end of the scale needs to be balanced somehow. The scale is balanced out with transportation costs. Up goes the price of corn to feed livestock, up goes the cost to transport the corn.

Let’s not forget that truck drivers are human beings. They can no longer drive more than 14 hours or so without a rest due to recent rules enacted by the Federal Motor Carrier Safety Administration. They get paid by the trip, not the hour. This affects trucking company profits. It’s getting expensive to transport food across the country.

That leads us to the bigger issue of food imports and exports. Many container ships were locked down and delayed during the pandemic. Some contained food that has since rotted. Prices of container ships coming from China to the United States skyrocketed during the pandemic for political and non-political reasons alike. This isn’t a political blog. So, we’ll just leave it at that. The main takeaway is that container ship prices can affect your food budget at the grocery store, no matter your political beliefs.

If you shorten the distance your food travels, and the hands it comes across, then transportation costs becomes less of an issue to you. By shopping for local goods at farmers markets, there isn’t a huge transportation cost factored into your food prices.

Labor

The idea of a few large meat-processing plants supplying a country the size of the United States is counterproductive in my opinion. We need to divide and conquer in order to feed the entire country. Local farms and farmers markets focus on supplying their respective geographic region.

Mass food manufacturers and meatpacking factories are built for speed and profit. They were not built to withstand COVID-19 or social distancing. During the pandemic, factories have struggled to keep their employees safe and their workers at work.

People want to feel safe at all times. This is especially true during a pandemic. Many food industry workers left behind long hours and low wages to seek other avenues to provide for their loved ones. Workers across the food chain are demanding better work environments, including grocery store clerks, factory workers, farm hands and restaurant staff. Some businesses are raising wages to attract workers back. Food prices have risen, in part, to offset these costs. It’s a pendulum effect.

Many independent farmers you’ll find at the farmers market run their business with little to no staff. The labor loss dilemma hasn’t affected them as much, so their prices haven’t risen as dramatically.

SNAP benefits

With grocery store prices rising, you might wonder how our fellow citizens on a limited income are supposed to pay for this food. If you were on a tight budget already, food shopping can feel pretty daunting these days.

The U.S. government has two labels for those who don’t have enough food: Food Insecurity and Food Insufficiency. Food Insecurity refers to people who don’t have consistent access to nutritionally adequate food due to limited resources. Food Insufficiency is more severe than Food Insecurity as it involves the inability to acquire food (whether on occasion or all the time) due to a lack of resources.

The U.S. closely monitors Food Insecurity and Food Insufficiency. As a chef whose job is to feed people, I agree it is important to monitor so that something can be done about it. The pandemic and food inflation have put an even greater strain on people living with Food Insecurity and Food Insufficiency. It’s disheartening to know there are more people going hungry or lacking adequate nutrition due to rising prices at grocery stores, especially when compounding factors such as medical or mental illness such as depression come into play. The human body needs proper nutrients to thrive.

One way policymakers help low-income Americans to afford rising food costs is through federal food programs. One that has been around for a while is the Supplemental Nutrition Assistance Program (SNAP). SNAP increases access to adequate and healthy foods so qualifying applicants and their families can eat a sound diet.

The pandemic has brought forth an update to the USDA Thrifty Food Plan, which has been around since the 1970s. It sets the benefit amounts for families who receive SNAP. The average SNAP benefit increased for fiscal year 2022 (beginning on October 1, 2021). This is a small light at the end of the tunnel for families who rely on SNAP to get by.

The plan has not been reevaluated on this scale since the 1970s when it was founded. That’s a long time ago. Food prices have clearly risen since the 70s, yet the benefits remained stagnant. The last increase was an inflation adjustment in 2006. It has plateaued since then.

Most farmers markets accept SNAP, at least here in New York and in the Hudson Valley. That’s just another reason to support our local economy. Your dollar has value and it can be used to speak volumes.