Let’s think about what’s been going on with food prices this Foodie Friday. I do the bulk of the food shopping so I might be more attuned to both the food supply and food prices than many of you, I get that. However, this is something that affects us all (unless you don’t eat, which is another issue altogether).
You’ve probably noticed that your grocery bills have gone up steadily over the last six months. That’s been due to the pandemic. You’ve read about the problems in meat processing plants as well as shortages of many other items due to supply chain disruptions and the shift from many of us working in an office (and eating meals away from home) to working at home (where we’re supplied by grocery stores). You’ve probably also recited the “supply vs. demand” mantra to yourself as prices rose, as the supply of some food items diminished, and the demand grew.
What you might not realize is that many of those issues have gone away. Have prices fallen? Not so much although they are down a little from their peak. As an NBC News article said:
Pandemic grocery prices shot up like a rocket and fell like a feather, even after supplies recovered. While the average price of ground beef was down by over 9 percent last month, shoppers are still paying nearly 13 percent more than they did in January.
Do I think it’s all price gouging or companies taking advantage of a horrible situation? No, not all of it, but you can’t help but wonder why prices for many items that are in abundant supply remain high. An analysis of consumer price index data for February through June, conducted by 24/7 Wall St., is shedding some light on the exact items that are driving up your grocery spending the most. According to the analysis, you’ll find that foods like dried legumes, peanut butter, ham, and potatoes have seen a price increase of 7% or more. However, the five items that top the price-growth list are mostly found in the meat aisle. Hot dogs, chicken, pork chops, and most beef cost quite a bit more than they did pre-pandemic even though, based on what I see in the stores I patronize (and supported by the data I could find), the shortages are pretty much over.
I think we’re all aware of the unemployment situation and the fact that the support system for those folks who’ve been fired or furloughed is shaky at best. Food insecurity has been a problem in this country pre-pandemic and it’s only been exacerbated. I also get that many variables go into establishing the price of foods in grocery stores, including costs to the grower, the processor, the manufacturer, the distributor, and lastly, the retailer. Increases in food prices are driven by dozens – if not hundreds – of different factors. But I also see that the food producer stocks are doing pretty well, and they’re still paying dividends. Maybe now is the time for them and others in the food chain to think about putting the customers ahead of shareholders, at least in the short term? Is taking a short-term hit or foregoing a dividend a fair price for supporting your customers and building goodwill?
Now, ask yourself a similar question.