Grocery prices are rising quickly, with many suffering from the steep cost of basic necessities. Yet, why is this the case? Since 2020, the price of groceries has increased by nearly 25%, causing the cost of living for many middle-class American families to go up. There is no single factor to explain this reason. Instead, it is essential to view how our chain of production has been affected by current events. It is no secret that many prices have increased since COVID-19 due to the sudden loss of jobs and the shutdown of factories. However, other factors like wars, climate, and other diseases are also to blame for the constant increase in food prices.
Currently, the war in Ukraine has destabilized many exports and imports, with one major trade being fertilizer. Before Russia attacked Ukraine, the country produced enough nitrogenous fertilizer to supply 70% of domestic demand. This sudden disappearance of a major supplier caused one-fifth of U.S. farm cash costs.
The war increased the cost of agriculture and transport. Many Americans know that a large amount of fuel is required nowadays, with gas prices going from $2.60 per gallon in 2019 to $3.55 per gallon now. This affects not only individuals but also entire supply chains dedicated to transportation.
Another prevalent issue is the presence of diseases such as bird flu. This causes the infection of $123 million worth of poultry. This lack of supply to the citizens’ growing demand and chicken population loss causes prices to skyrocket in many meat sectors. However, climate change is also to blame. Many agricultural sectors are experiencing major floods or droughts, which have caused crop losses to exceed $5 billion, about a 100% increase from 20 years ago. These factors affect every person in the supply chain, raising grocery prices with no end in sight.
Sources
https://www.cspinet.org/cspi-news/why-are-groceries-so-expensive-what-you-need-know
https://www.eia.gov/naturalgas/data.php
