It used to be fairly easy to score all kinds of deals on grocery staples like butter, eggs, and other everyday items. But why is it so hard to find these food items on grocery store shelves lately, and why are these foods so expensive when you do find them? Buckle up, because a mix of climate change, supply chain issues, and bird flu are to blame here. And although rising grocery prices might seem grim, staying on top of predicted food spikes can help you plan ahead and make helpful adjustments to shopping and meal planning.
Why Are Egg Prices Spiking?
This time, it turns out, supply chain issues are not to blame. A strain of bird flu is affecting the farming stock across America, and many chickens that typically produce hundreds of eggs per year are adversely affected.
According to the Economic Research Service (ERS) of the United States Department of Agriculture (USDA), “Retail egg prices increased 11.1 percent in December 2022 and reached 59.9 percent above December 2021 prices.” This is due almost entirely to an outbreak of H5N1 in birds.
The USDA notes that bird flu has affected more than 57 million birds in 47 states, and egg prices are predicted to increase a whopping 27.3 percent in 2023.
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The Cost of Butter Is No Better
According to MarketWatch, “Butter prices rose by 31.4% on the year in December [2022], up from 27% in November, making the average price for a pound of butter $4.81 nationally. It was $3.47 a year earlier.” Due to rising temperatures and the extreme heat waves seen across most of the country last summer, cows are eating less, and therefore producing less milk.
The cost of running cow farms are also increasing, and many farmers are unwilling to shell out more money to sustain larger herds. Feed typically supplied by overseas factories have also been impacted by the war in Ukraine, causing a rise in food costs for the farmers to feed those cows, MarketWatch reports. In general, Ukraine and Russia combined produce 28% of the world’s supply of wheat and 15 percent of the world’s supply of corn—both foods commonly fed to cows.
What Other Foods Are Expected to Be More Expensive in 2023?
Unfortunately, the U.S. is set to see food cost increases in a few different categories this year. Other (non-poultry) meats are expected to rise in cost by 12.8 percent, whereas dairy products are expected to rise by 8 percent. “Fats and oils (16.5 percent), processed fruits and vegetables (9.6 percent), sugar and sweets (10.6 percent), cereals and bakery products (12.0 percent), nonalcoholic beverages (8.7 percent), and other foods (6.8 percent)” are also expected to rise in cost, says the USDA.
There is a slight silver lining: A predicted decrease in food costs for 2023 in a few categories. Beef and veal prices are predicted to decrease 1.8 percent in 2023; pork prices are predicted to decrease 3.0 percent; and fresh fruit prices are predicted to decrease 1.7 percent, per the USDA.
Rising food costs can be frustrating, but experts say sticking to a strict grocery list while you’re at the store can help. Buying in bulk, learning to reduce your food waste, and shopping under store labels instead of name brand labels might also help.
The recent fluctuations in grocery prices and the scarcity of staple items like eggs and butter indeed stem from a confluence of factors. Let's break down each component:
Climate Change: The extreme heat waves experienced across the US have adversely affected dairy production. Cows eat less during high temperatures, leading to decreased milk production. This reduction in milk directly impacts butter supply and, consequently, raises its prices.
Supply Chain Issues (War in Ukraine): The war in Ukraine has disrupted the supply of essential animal feed, like wheat and corn, impacting the cost of maintaining larger herds. Both Ukraine and Russia contribute significantly to the global supply of these grains, affecting the overall cost of feeding livestock.
Bird Flu Outbreak: The outbreak of H5N1 avian flu has significantly impacted poultry farms across the country. This flu strain has affected millions of birds, reducing egg production and causing a substantial increase in egg prices.
Projected Price Increases in 2023: The USDA forecasts increases in various food categories beyond eggs and butter. Non-poultry meats, dairy products, fats and oils, processed fruits and vegetables, sugar and sweets, cereals, bakery products, nonalcoholic beverages, and other foods are all expected to rise in cost.
Projected Decreases: However, there's some relief predicted in specific categories like beef, veal, pork, and fresh fruits, where a decrease in prices is anticipated.
Strategies to Mitigate Rising Costs: To navigate these price fluctuations, experts recommend adhering to a strict grocery list to avoid unnecessary purchases, buying in bulk for cost-efficiency, reducing food waste, and opting for store-label products instead of branded ones. These strategies can help mitigate the impact of rising prices.
Tips to Save Money: Beyond the immediate impact, there are practical tips, like cutting kitchen waste, that not only help save money but also contribute to more sustainable consumption practices.
These challenges in the food industry showcase the intricate interplay between climate, global events, supply chains, and their direct impact on consumers' daily lives and budgets. Staying informed and adopting savvy shopping and meal planning strategies can be invaluable in managing these price hikes.
