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What Is Driving the Increase in Food Prices?

That’s the title of a piece I wrote for Econofact. In it, I discuss the latest figures out from the Bureau of Labor Statistics, and discuss some of the drivers of volatility in food prices since the onset of the pandemic.

More than a year into the pandemic, they are facing another unfamiliar trend when it comes to accessing food: notably higher prices. Increases in wages in the food sector, rising agricultural commodity prices, transportation bottlenecks, and strong consumer demand have led to the highest annual grocery price increases in a decade and the highest annual restaurant price increases since the early 1980s.

The main facts I outlined and discussed were:

  • Food prices have risen at a faster average rate since the onset of the pandemic than they did over the prior decade.

  • Food prices have been extraordinarily volatile throughout the pandemic.

  • Meat price changes have been a primary driver of overall food price increases.

  • Agricultural commodity prices have increased.

  • Heightened consumer demand has contributed to food price increases.

  • Wage rates in the food industry have significantly risen over the course of the pandemic and these higher wages get reflected in higher food prices.

  • Food isn’t necessarily less affordable — especially when considering a longer horizon.

You can read the whole thing here.