Food inflation in the United States has jumped to its highest level in over four decades, putting more stress on American consumers, while agricultural output in the country took a beating following droughts.
“From the same month one year ago, the PCE [Personal Consumption Expenditures] price index for August increased 6.2 percent. Prices for goods increased 8.6 percent and prices for services increased 5.0 percent. Food prices increased 12.4 percent and energy prices increased 24.7 percent. Excluding food and energy, the PCE price index increased 4.9 percent from one year ago,” a Sept. 30 BEA news release said. The 12.4 percent annual increase in food prices is the biggest hike since February 1979.
On a monthly basis, food prices rose by 0.8 percent and energy prices fell by 5.5 percent. The PCE price index excluding food and energy rose by 0.6 percent in August.
Earlier, data from the U.S. Bureau of Labor Statistics had shown that 12-month food prices jumped by 11.4 percent in August. In January 2021 when President Joe Biden assumed power, annual food inflation was at 3.8 percent.
White bread prices in U.S. cities have risen from $1.467 per pound in August 2021 to $1.756 per pound in August 2022 on average, an increase of 19.7 percent.
During this period, ground beef prices rose by 10.5 percent from $4.468 per pound to $4.937, fresh whole chicken prices rose by 27.6 percent from $1.472 per pound to $1.879, and egg prices saw a massive 82.3 percent jump from $1.709 per dozen to $3.116.
A survey by the University of Michigan found that three in four American citizens between the ages of 50 and 80 have been affected by rising grocery prices, with one in three making do with a less nutritious diet.
A poll by Rasmussen Reports published in August found that 63 percent of Americans had changed their eating habits due to rising food costs. Among individuals earning less than $30,000 per year, this number was 75 percent.
Aggravating the crisis of rising food prices is the expected poor harvest of the U.S. agriculture sector. The country faced persistent drought conditions throughout summer, affecting the states in the Grain Belt, which have seen a major reduction in harvest due to a lack of water.
On Sept. 12, the U.S. Agriculture Department lowered its national corn production estimates to 13.9 billion bushels, 8 percent lower when compared to the total harvest last year.
In an interview with The Washington Post in early September, USDA meteorologist Brad Rippey said that drought had consumed 40 percent of the United States in the previous 101 weeks.
“Spring wheat, durum wheat, barley [in the Northeast]—those were just hammered in 2021. For some of those crops it was the lowest yields we’ve seen since the 1980s,” Rippey said.
“The biggest impacts this year have been the Central and Southern Great Plains—Nebraska southward through Texas—and the two big crops hit this year are grain sorghum [primarily used for animal feed] and cotton.”
Spring planting of wheat has been affected due to dry conditions in the production regions. Speaking to the media outlet, Katie Cahill, spokeswoman for the California Rice Commission, said that the production of California rice is around 50 percent of a normal year’s output.