Overview

In the midst of the holiday season, one thing is on everyone’s mind: food. But whether food is easily accessible and affordable is another story and gives way to the different, less joyful word on everyone’s minds: inflation.

To understand the impact of inflation on current food prices in the United States, I will explore the following areas:

• current causes of food inflation in the US,
• the rise of food prices and impact on low-income households, and 
• food insecurity during the holidays.

Current Causes of Food Inflation in the US

It is important to put the current rates of inflation into context. In the United States, the price of food began to increase in mid-2021 and coincided with higher distribution costs, labor shortages, and commodity price increases in the sector. Many farmers and manufacturers saw disruptions in the supply chain which led them to shut down temporarily or permanently. Labor shortages and higher wages were reflected in the raised menu prices for customers. At the same time, global food prices were also increasing but the start of the war in Ukraine in early 2022 exacerbated these trends. Evidently, the war has put significant pressure on global food inflation which began to increase first in developing countries and then in developed ones.

COVID-19 Pandemic 

Unfortunately (but not surprisingly), the COVID-19 pandemic continues to mark our lives in numerous ways which includes inflation. Although, a global pandemic like this one is rare, this means that there is less information for policymakers to rely on regarding decision-making protocol during periods of emergency. According to a White House statement on prices during the pandemic, three temporary factors have contributed primarily to the increase in inflation: 

1. base effects,
2. supply chain disruptions and misalignments, and
3. pent-up demand. 

Base effects occur when “the base, or initial month, of a growth rate is unusually low or high.” Supply chain disruptions arise when the cost of production increases and businesses decide to pass on higher prices to consumers. Finally, pent-up demand during the pandemic has led to a surge in consumers eating out at restaurants. But as Americans find less food options available compared to pre-pandemic levels, restaurant prices may increase as a result. Optimistically, the authors believe that these factors will be “transitory,” fade over time, and mimic America’s behavior following past wars and pandemics. But they do warn that history is “not a perfect guide” either.

Future Outlook on Food Inflation

While history may not be able to predict our future exactly, we have tools today to get a picture of what is likely to come. According to the USDA, food prices, food-at-home prices, and food-away-from-home prices are expected to “grow more slowly in 2023 than in 2022” but will remain above “historical average rates.” According to President Joe Biden’s recent statement on Personal Consumption Expenditures in October, inflation moderated and the nation is on their way to “more steady, stable economic growth” and food inflation has also slowed.

“How people believe prices are going to behave in the future plays an important role because inflation expectations can sometimes become self-fulfilling.”

– Alberto Cavallo, Associate Professor Harvard Business School

The Impact of Rising Food Prices on Consumers and Low-income Households

The rise in food prices is reflected in the changing consumer habits. According to CNN, more consumers are searching for deals, switching to off-brand choices, and eating at less pricey restaurants like IHOP and Applebee’s. Others have started shopping at cheaper grocers and buying store-bought items instead of making them at home. Most worryingly, one respondent stated that once she can afford it, she will “go back to buying more fruits and veggies.” In Los Angeles County, 12.1% of adults reported consuming five or more servings of fruits and vegetables the previous day and the rate rose with education and income. It is not difficult to understand how income can affect buying habits. Increasing food prices do not affect everyone equally. According to Rory Smead, an associate professor at Northeastern, those in the “middle class and reasonably comfortable” will not feel the impacts as much as those “working in the margins.” So with the rise in food inflation and daily fruit and vegetable consumption rates already fairly low at least in Los Angeles, a county with a high rate of food insecurity, we should be very concerned about how rising prices are affecting the long term health of low-income households.

COVID-19 Pandemic and Food Insecurity

According to the White House National Strategy on Hunger, Nutrition, and Health, the COVID-19 pandemic “exacerbated food insecurity, diet-related diseases, and health disparities” and disrupted a decade-long downward trend in food insecure households with children (p. 6). In 2021, the USDA reported that 13.5 million (10.2%) US households were food insecure at some point during the year while 8.4 million (6.4%) US households reported low food security. In California, 8 million residents struggle with food insecurity and in Los Angeles County, 30% of low-income residents don’t know where their next meal will come from. NYU also found that the pandemic increased food insecurity especially among families with children and that school closures made it more difficult for children to access meals through the National School Lunch program.

Food Insecurity During the Holidays

The holiday season can be the busiest times of year for food banks and with the impact of the pandemic and the conflict in Ukraine on inflation and food prices, food-insecure households and individuals are even more vulnerable during this time of year. Additionally, as schools close for the winter break, students who benefit from the National School Lunch Program temporarily lose access to a source of food. 

As we continue to ease the pandemic restrictions on everyday life, economic instability and uncertainty remain. That is why the White House Conference on Hunger, Nutrition, and Health is so important. In its first pillar, The National Strategy recognizes the need for economic security and providing Americans and their families with more income through expanding the Child Tax Credit, the Earned Income Tax Credit, and the minimum wage.

In the meantime, families need to eat now which is what many organizations and groups are focused on throughout the country year-round.

Food Finders

Food Finders, anticipating the increased need during the holidays, holds an annual Holiday Food Drive to collect food for their non-profit partners. It begins October 1st through December 31st. Throughout November, Food Finders held a Turkey Drive and during their Holiday Pack and Sort event on November 19th and 20th, the organization distributed 2,322 food boxes for agencies to provide for families and assembled a total of 4,231 boxes. They also distributed 2,600 turkeys during the event and provided an additional 200 turkeys and 100 hams during the month of December.

What Can You Do To Help?

Food Finders works daily to change how food waste is distributed to eliminate hunger and food insecurity. If you would like more information, please visit our website, volunteer, or support our mission to eliminate hunger and food waste by making a donation today.

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Nickee O’Bryant is the Community Outreach and Advocacy Intern at Food Finders. She is a senior at California State University, Long Beach and is studying International Studies and French and Francophone Studies. Through monthly blog posts, Nickee documents her journey as she learns more about food insecurity, food waste, and how they are interconnected.