COLUMBUS, Ohio – According to the Food and Agriculture Organization of the United Nations, the world’s food prices increased by 1.1% in January from December.
Agriculture expert Andy Vance explained what’s driving the surge.
“Food prices going up along with everything. The inflationary story has been really well told. When you look at the specific products in the index that are going up the most, at least over the last month, it’s been vegetable oils and dairy,” Vance said.
Vegetable oils index increased more than 4%. Dairy products index increased about 2.5%.
Vance said due to inflation, the prices of most goods are increasing. He said many economists don’t expect those increases to cool off until 2023.
“We still have logistics issues related to ports and being able to have some foods and other goods shipped in due to container availability and the price of ocean freight. You know, here domestically we have issues with trucking, so that’s a big part of it. And the issues I’m talking about are usually related to labor, having enough people to fill those jobs, people with CDLs who can truck foodstuffs from hither and yon. So that’s all part of the process. Labor at food processing plants. You know, the labor story that’s been a big part of the pandemic overall storyline. That’s a big part of the food price storyline as well,” he said.
As for how it will affect consumers, Vance said, so far higher prices haven’t deterred people from the items they typically purchase in the grocery store.
“As a consumer, you know, the interesting thing (I was talking to this beef industry economist) is that consumers really haven’t balked at higher prices for meats at the grocery store, so when you go and you decide you want to buy a hamburger, you’re still buying hamburger. Prices haven’t really turned consumers off to a lot of these foodstuffs, which I think is actually a reflection of how inexpensive as a percentage of our income food is in the United States. Very different story here than in many parts of the world where higher food costs are really a life and death issue. Here in the States, we spend a very small percentage of our income on food. So we’re able to absorb some of these costs. It may not feel like it all the time when you go to the grocery store and write that check, but overall, it’s still a very small percentage,” he said.
