Food Prices Stabilizing For Now

Covid caused a lot of disruptions to the food industry.

Restaurant closings meant food-at-home and food-out of home year-to-year figures lost all relationship with one another as almost all food suppliers suddenly had to shift their products for retail distribution just as unreasonable hoarding affected supply chains and meat-processing plants closed due to a lack of social distancing just before restaurants started coming back to life and needed food.

The consumer price index reports food prices in the US were up 5.9% June 2019 to June 2020, reflecting the early disruptions that have since ironed themselves out.Food industry analyst Bob Goldin with Pentallect says the business has been remarkably resilient, and with a .4% increase in December after a .3% decrease in November seem to be humming along efficiently. “But now things seem to be stabilized and we’re on a low cost inflation.”

Global prices are at a six year high, and China could play a role in future markets. They’re buying more meats, the demand increase lifting prices. Farmers in the US have been hard hit by unfavorable weather conditions in the past couple years, their business further hampered by overstock in some instances. “Fluid milk has been a huge oversupply so pries have been very low,” says Goldin. “Some of the grain-based products have been in an over-supply so we’re not really seeing any price pressures.”

Driving current increases is the cost of non-alcoholic beverages, up 1.1% in December. That compares to fruit and vegetables, which saw a .2% increase.

photo: Getty Images

Food Prices Continue To Rise At Alarming Rate

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