16 August 2024
Grocery prices, a persistent concern throughout the Biden administration, have been a major issue for many Americans. While the rapid increase in food costs has started to slow down, food inflation remains a top concern for voters, according to recent polls.
In the past four years, grocery prices have seen a significant surge, causing strain on household budgets. A YouGov poll published last month revealed that 64 percent of Americans consider inflation a "very serious problem," with grocery costs being a primary concern. Despite this, there has been some relief as the pace of food price increases has gradually slowed over the past several months.
New data expected this week will reveal whether the trend of cooling inflation has continued. Economists predict that overall inflation likely rose by 3 percent in July, consistent with June's increase. Such a reading could influence the Federal Reserve's decision on interest rates, with potential cuts anticipated in September.
Over the past year, grocery prices rose by 1.1 percent through June, a significant drop from the peak increase of 13.5 percent seen in August 2022. Despite this slowdown, food prices have not decreased; they continue to rise, albeit at a more moderate pace. Compared to four years ago, grocery prices are now about 20 percent higher.
The spike in grocery costs is due to a combination of supply and demand pressures, many of which are linked to the pandemic and other global events. Initially, the pandemic led to a shift from dining out to buying groceries, with consumers stockpiling essentials. This was compounded by disruptions in supply chains as workers in grocery stores, warehouses, and meat processing plants were affected by Covid-19.
In early 2022, Russia's invasion of Ukraine further exacerbated the situation by driving up energy prices and the costs of key commodities like grains and vegetable oils, which in turn increased food production and transportation costs. More recent factors, such as droughts and an avian flu outbreak, have also strained food supplies.
David Ortega, a food economist at Michigan State University, noted that the majority of food costs stem from activities that occur after the food leaves the farm, such as transportation, packaging, and processing.
Looking ahead, several economists expect grocery inflation to remain at current levels in the coming months, barring any significant disruptions. The Agriculture Department has forecasted that prices for "food at home" will rise by 1 percent in 2024, down from a 5 percent increase last year.
While some food categories, like beef and veal, have seen higher-than-average inflation, others, such as ham, milk, and seafood, have experienced price declines over the past year.
However, the potential for climate-related disruptions, such as an active hurricane season, could impact food supply and lead to higher inflation, according to Meagan Schoenberger, a senior economist at KPMG.
High food costs continue to be a significant political issue for the Biden administration. On the campaign trail, Vice President Kamala Harris, the Democratic presidential nominee, has acknowledged the problem, promising to address price gouging if elected. Meanwhile, President Biden has criticized food and beverage companies for what he describes as excessive profits and has called on grocery chains to lower prices.
Some food companies have responded by signaling plans to reduce prices for certain products in response to declining consumer purchases. For instance, PepsiCo has announced intentions to cut prices or offer more promotions on certain snacks and other items.
Despite these efforts, many consumers remain frustrated by the persistent high costs of groceries and other essential expenses. For some, like Jerlyn Heisz, a 79-year-old retired nursing assistant from Platteville, Wisconsin, the rising costs have made it difficult to afford anything beyond the necessities.
Ms. Heisz, who lives on a fixed income of $1,500 per month, said her grocery bills have risen to as much as $150 per month, up from about $100 before the pandemic. While she has cut back on purchases, especially fresh fruits and vegetables, she does not blame President Biden for the increased costs, despite the challenges she faces.
Go to all articles
04 July 2025
KuCoin Futures Ranks 4th Globally on CoinGlass' Latest Derivatives Exchange List
30 June 2025
BitsBitcoin Launches New Website Design
27 June 2025
Best Crypto Exchange with Lowest Fees
23 June 2025
Apple sued by shareholders over AI progress disclosures
20 June 2025
Cryptocurrency Regulation in Romania
16 June 2025
5 Top Cryptocurrency Exchanges To Buy BTC With Low Fees And High Security - The Industry Spread
09 June 2025
FinTech innovations: Transforming Nepal's banking landscape
06 June 2025
Cardano (ADA) Struggles Deepen: Price Slips Further, Investors on Edge
02 June 2025
James Wynn's $99 Million Cryptocurrency Liquidation Analyzed
29 May 2025
China's State-Backed Think Tank Considers Bitcoin Reserve, Sony Bank Goes Web3: Asia Express
24 May 2025
China's Internet Watchdog Cracks Down on False Financial Claims, Stock Touting
19 May 2025
MEXC Launches DEX+ Super Fest with Multiple Rewards and Fee Rebates
Effective assistance on various aspects of your trading account and other financial activities related to trading on the broker's platform.