Eggs are 60% more expensive than last year. Why do some foods keep getting more pricey?
Inflation might finally be slowing down, but that hasn’t stopped the price of some household food staples from soaring.
During the month of December, prices declined 0.1%, a slower change than November’s 0.1% increase according to the Bureau of Labor Statistics’ latest data. Over the 12-month period of 2022, prices still climbed though, clocking a 6.5% increase.
Despite the more hopeful outlook, food prices in particular saw a generous jump last year.
Here are some of the foods that saw the biggest price increases in 2022 — and why:
Eggs
Egg prices soared in 2022, jumping 11.1% in December and a whopping 60% over the last year.
The main culprits for the drastic change: lingering supply chain complications caused by the COVID-19 pandemic and the deadliest avian influenza outbreak in United States history, experts say.
Since January 2022, the outbreak has impacted nearly 58 million birds across 47 U.S. states, according to the Centers for Disease Control.
The outbreak has specifically taken a toll on “layers” — birds responsible for laying eggs, Amy Hagerman, an assistant professor at Oklahoma State University who specializes in agricultural economics, told NPR.
Just a few farms disposing of their flocks due to infection would be enough to cause major disruptions for egg prices, Hagerman said.
“Generally speaking, these complexes are over a million birds, easily,” she told NPR. “It takes fewer egg-laying operations being affected by HPAI to drive up the price of eggs and egg products.”
So, what happens now? When will prices come down?
Some experts say it could take a while before consumers see a decline at the grocery store.
Higher prices could last through at least March, Bill Lapp, president of Advanced Economic Solutions, a consulting firm specializing in food economics, previously told CNBC.
But others are more optimistic, arguing that demand will slow after the surge that comes with the holidays.
Wholesale prices are starting to decline, Brian Moscogiuri, a global trade strategist at Eggs Unlimited, an egg supplier based in Irvine, California, told Axios. While it might take time for this change to be reflected at the grocery store, it’s a move in the right direction that will be aided by seasonal shifts in demand.
Flour, cereal, bread and bakery products
The cost of cereals and bakery products got 11.8% more expensive during 2022. Some prices soared higher than others, though.
The price of flour and prepared flour mixes climbed 23.4%; white bread got 17.7% more expensive; cookie prices jumped 18.2%.
But why?
Russia is a leading exporter of wheat, according to the USDA. Since the start of the war with Ukraine, the country has been producing less wheat, which is driving prices up.
Furthermore, climate change is making harvests less predictable and volatile energy prices have made the cost of producing wheat a burden for some producers, according to The New York Times.
There might be some good news on the horizon. During the month of December, cereals and bakery products only got 0.3% more expensive, and some categories saw declines in prices or no change at all. The slowdown in price change could indicate that the worst has passed.
Butter and margarine
Fats and oils also saw a steep price hike in 2022, getting 23.2% more expensive. Specifically, butter prices jumped 31.4% and margarine climbed 43.8% over the last 12 months.
Like most everything else, the price of these products is somewhat a result of elevated labor costs and distribution, according to economists, CNBC reported. But there are other factors at play, too, including the war in Ukraine, milk production and weather.
Ukraine is the world’s major producer for sunflower oil — one of the main ingredients in margarine — accounting for 31% of all production between 2020 and 2021, according to the USDA.
“Market uncertainty about sunflower oil supplies from Ukraine has created additional demand for other vegetable oils, such as palm, soybean, and canola,” the USDA wrote in a June 2022 report. “Supplies of these alternatives are expected to be tight in the 2021/22 marketing year, contributing to elevated vegetable oil prices.”
Weather conditions in other big vegetable oil producers, including Canada and Brazil, also impacted the availability of ingredients for margarine, driving prices up, CNBC reported.
Butter, too, has seen a price increase, mostly driven by decreased milk production.
Globally, heat and drought are creating stress for cow, limiting their ability to produce milk, MarketWatch reported. Plus, its become harder for farmers to maintain their herds due to increased supply-chain disruptions, labor shortages and rising costs for cow feed,
“All the costs that go into producing a stick of butter, all those costs have risen,” Matt Herrick, a spokesman for the International Dairy Foods Association, a group representing dairy producers, told CNBC.
Experts say the heightened costs could last a while as the world grapples to keep up with a laundry list of factors.
“Basically, dairy product prices are not going to go back to average levels until feed costs and all these other costs of producing milk — particularly expanding milk production — go down,” Peter Vitaliano, chief economist at the National Milk Producers Federation said, according to MarketWatch.
Lettuce
Lettuce prices jumped 24.9% during 2022, getting 4% more expensive during the month of December alone.
Like eggs, another viral outbreak is to blame for these high prices, experts say.
Lettuce crops in Salinas Valley, California, which provides more than a half of all of America’s lettuce, were infected by a virus known as impatiens necrotic spot virus, or INSV, according to the California Farm Bureau Federation. The virus destroyed $1.2 billion worth of annual production.
Growers expect the damage will last at least a few years, especially as warmer temperatures make it harder to contain the spread of the virus.
“It’s going to be a rough go for the next couple years,” Tony Alameda, manager at Topflavor Farms, a grower of lettuce in the Salinas Valley, told the federation. “The impact of this is huge.”
This story was originally published January 12, 2023 at 12:57 PM with the headline "Eggs are 60% more expensive than last year. Why do some foods keep getting more pricey?."
