by Daisy Luther, The Organic Prepper:
If you listened to any of President Biden’s State of the Union addresses, you may have been surprised to hear that inflation has slowed down. (Here’s Marie’s breakdown of the speech.)
A fact check from USA Today clarifies Biden’s claims:
Biden touted six straight months of slowing inflation, arguing that his policies are helping tame what has been the top domestic challenge of his presidency.
TRUTH LIVES on at https://sgtreport.tv/
The president is correct that inflation is trending downward. Yet there are nuances.
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- Consumer prices were still up 6.5% in December from a year earlier: Prices are trending down but Americans are still facing historically high costs of living. One household staple, eggs, cost 60% more than a year ago.
- Cost of living is high: Families are still struggling to pay high energy bills along with other rising costs for essential goods, like food and rent, that are increasing at a faster rate than the overall rate of inflation. Grocery prices rose 10.4% annually in December and rent rose about 7.5%, while overall inflation increased by 6.5%.
Of course, I’ve never heard a president give a SOTU address in which he didn’t try to spin his performance in the most positive light possible. Grabbing onto a statistic that supports their supposed good work as a leader is as universal as it is misleading.
Perhaps giant corporations are facing less inflation, but the average American is still struggling to make ends meet. Our reality is quite different than the one reported in that speech, no matter how much it’s repeated that everything is just fine.
What are food prices really like?
Time Magazine recently investigated the cost of food in America, and here’s what they found that belies the President’s statement that we’re doing a whole lot better economically.
Although overall inflation is starting to cool, shoppers haven’t seen much relief in terms of grocery prices, which were up 11.8% in December compared with a year earlier. Gone are the days when someone could walk into a grocery store and buy a dozen eggs for $1.50 or a gallon of milk for under $3. Instead, nearly every food group costs more than it did a year ago: grade A eggs are up 138%; margarine, up 43.8%; butter sticks, up 38.5%; all-purpose flour, up 34.5%; and spaghetti and macaroni noodles up 31.3%, according to the most recent Bureau of Labor Statistics (BLS) data.
When you apply the increases across an entire cart of groceries, we’re paying hundreds of dollars more for the same food.
Why is the price of food so high?
It appears we’ve been weathering the perfect storm – if by “perfect” we mean economically catastrophic.
First, there are all of the issues that remain after the pandemic devastated the economy. Farmers cut back on food production to keep afloat, and now the laws of supply and demand mean that the same butter costs 31% more than it did a year ago.
Then there’s the avian flu epidemic. This has seen the poultry population decline, obviously reducing the supply of meat and eggs. Eggs are the one thing that has seen the most dramatic increase – they’re up a whopping 138%.
Bad weather has also affected the food supply. Everything from droughts to floods to insect-borne viruses has decimated fruits and vegetables. The Time report says:
…a wholesale box of romaine, which would normally cost around $10 to $20, was being sold for nearly $90 in November and December.
As well, our supply chain never fully recovered after the Covid pandemic decimated it.
When will things get better?
It’s really difficult to say when the price of food will go back down. We’re in such a precarious situation that any issue could cause more increases, but at the same time, it’s possible that it nothing bad happens, we could also begin seeing some decreases. Time reports that there’s no clear-cut answer to the question that’s on everyone’s mind.
Analysts say that there’s no straight answer on when grocery prices will drop as it relies on a number of factors, including post-pandemic consumer demand, ongoing supply chain shortages, geopolitical events such as the war in Ukraine, and unstable weather patterns.
But many of these key factors fueling inflation are starting to fade—meaning prices should stabilize this year, even if they may never go back down to pre-pandemic levels. Shipping costs are declining and Americans are purchasing less as they feel the pinch of inflation. Tom Bailey, senior analyst of consumer foods with Rabobank, predicts that prices will soften up in early 2023 as we “revert back to more improved production and more reasonable demand.”
Still, there’s a possibility that some prices continue to rise. “If the last 24 months have told us anything, don’t ever assume that things can’t change or get away from us,” he says.
In my opinion, we’re better off expecting the worst (continuing increases) while hoping for the best (some relief from the inflation.)
The CEO of Walmart had more to say about the future of food prices.
Walmart Inc. CEO Doug McMillon called inflation in dry grocery and consumables “stubborn, mid-double digit,” saying “those are going to just be with us for a while.”
“And it’ll get a little confusing because you’ll hear inflation numbers that start to sound lower, but you’ll have to remember, that’s on a two-year stack,” he continued. “So if inflation in dry grocery and consumables is only three or five, that’s on top of 15. And that’s still a problem for the customer and a pressure in their wallet.”
According to McMillon, the situation was different in the fresh food categories. He told analysts and investors to “think of the fresh categories as kind of bouncing around, going up and down, and being more volatile.”
Eggs, he noted, were “at 200% inflated in January” but have since dropped to “just 50% inflated,” something he said is “still a problem.” Meanwhile, milk “is actually less than a year ago,” and beef “is lower in terms of pricing” as well, McMillon said.
Walmart remains profitable, with the company doing well when people have extra money, and maintaining growth when times are tight by offering “value.”
Make the most of what you can afford
The goal here is for us to focus on our own households and make the most of the food we can afford. We need to use multiple strategies to do this, all of which I included in detail in my most recent book, What to Eat When You’re Broke.
Don’t waste food. Make sure you reduce the amount of food that spoils before you get to it. As well you should learn to use leftovers creatively. Some people don’t enjoy eating leftovers but by reinventing them in delicious ways, not only will your family eat them, they’ll love them. Turn them into hearty soups, pastry pockets, and flavorfully made-over meals.
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