News
The hidden costs of food: how higher prices affect families in the US
In recent weeks, those who went to the supermarket did not return very happy with what they saw. Understand why food prices have risen so much and what we can expect for the coming months and years.
Advertisement
US food prices are on the rise
If you’ve been to the grocery store in the last few weeks, you must have been surprised by the higher food prices in the US. In fact, the main indicators showed a significant increase in the price of most foods for daily consumption. When we compare prices with last year’s prices, we notice a big difference.
Thus, flour and flour mixture, a basic ingredient of several products, grew by 14.2%. Butter and margarine also saw a similar increase: 14%. Meat, milk and fresh fruit also recorded double-digit increases: 13.8%, 13.3%, and 10.1%, respectively.
In addition, we are facing the biggest outbreak of avian flu since 2015. As a result, prices for poultry and eggs have soared. According to the United States Department of Agriculture (USDA), poultry is 7% more expensive and eggs are 4.5%. Indeed, the “culprits” for seeing higher food prices in the US are known.
So the Russian-Ukrainian conflict and the “sequels” of the pandemic sound like a good explanation. However, to understand what is really behind this increase, we need to dig deeper. In this article, we will investigate how these world events really affect the US economy. So, stay here and learn about the “hidden costs of food”.
How the US economy has changed since Covid-19
As life returns to normal, we are still feeling the “after-effects” of Covid-19 in the US economy. Click here for an overview.
What is causing higher food prices in the US?
Indeed, higher food prices in the US can be explained as a by-product of global phenomena. In this way, a more detailed analysis allows us to understand how pandemic and military events affect our economy so much.
You will be redirected to another website
By submitting this form, I agree that I am 18+ years old and I agree to the Privacy Policy and Terms and Conditions. I also provide my signature giving express consent to receive marketing communications via automated emails, SMS or MMS text messages and other forms of communication regarding financial products such as credit card and loans. Message frequency varies and represents our good faith effort to reach you regarding your inquiry. Message and data rates may apply. Text HELP for help or text STOP to cancel. I understand that my consent to receive communications is not a condition of purchase and I may revoke my consent at any time.
The price of fertilizers has gone up
Russia is known on the world agricultural scene as one of the biggest fertilizer producers. In fact, the Russians are also exponents of the production of pesticides. Thus, it is to be expected that an armed conflict involving that country generates uncertainty regarding this productive input.
The prices of fertilizers based on Nitrogen, Potassium and Sodium rose by almost 50%. Thus, this increase was passed on to the vast majority of products on supermarket shelves.
In addition, Ukraine is a major world exporter of wheat and maize. In this way, the conflict and the damage of war will generate an increase in the price of these inputs in world terms.
Most expensive labor
According to Camila Abdelmalack, chief economist at Veedha Investimentos, hiring employees is increasingly expensive in the country. According to experts, unemployment rates are already close to the lowest rate in half a century, 3.6%.
Since the laws of supply and demand also work for work, it is now more expensive to hire employees.
More expensive energy
Food doesn’t arrive at your table if it isn’t through a complex transport network. This, in turn, depends on the price of fuel to price your service. As we are experiencing an increase in fuel prices, everything is expected to get more expensive.
Second, Donnie King, CEO of Tyson Foods, transportation costs influenced the 20% increase in the average price of products distributed by the brand.
Will food prices go down in the following months?
However, will higher prices in the US economy return to normal? Unfortunately, according to experts, it is still not possible to have high hopes. According to the World Bank, the effect could last for a few years. In fact, the latest reports indicate that this increase could continue until the end of 2024.
This state would be the result of a combination of the Russian-Ukrainian conflict and rising energy prices. In addition, inflation also contributed to the “plateau” of food prices.
How the Russia-Ukraine war can affect the Stock Market
The Russia-Ukraine conflict already affecting the international stock market. Click and learn how to manage your money in this scenario.
The effect of higher food prices on the US economy
When food prices and inflation rise, the poorest people suffer the most. According to Ayhan Kose, director of the World Bank’s Outlook Group, this is the population that needs more attention at times like the current one. Furthermore, high fees like this have a direct effect on the economy.
Undoubtedly, high prices tend to discourage consumption. In addition, higher food prices in the US economy also create pressure for higher wages. This effect is even more felt at times when the unemployment rate is decreasing. Thus, rising prices will fuel inflation until everything is under control.
Americans are paying for the most expensive gasoline in the last decade! So understand what is happening and when prices return to normal levels. Click on the link below and read an exclusive article.
When will gas prices go down in the US: understand the factors involved
When will gas prices go down? Understand why we're paying the most expensive gas in recent times and what we can expect in the coming months.
Trending Topics
Wells Fargo Active Cash℠ credit card full review: should you get it?
The Wells Fargo Active Cash℠ received 5 best credit card awards. Meet this financial product and its powerful 2% unlimited cashback program!
Keep ReadingCiti Simplicity® Card full review: should you get it?
To avoid interest, count on the Citi Simplicity® Card. This card offers almost two years of 0% intro APR for balance transfers. Learn more!
Keep ReadingFortiva® Mastercard® Credit Card with Cashback Rewards full review: should you get it?
Meet the Fortiva® Mastercard® Credit Card with Cashback Rewards, a card that gives you incredible cash back. Check our review to learn more!
Keep ReadingYou may also like
True American Loan Review: Fast, Flexible Lending
Explore our True American Loan review and learn how you can easily borrow the money you need to cover your expenses, no matter your score!
Keep ReadingCapital One Quicksilver Secured Cash Rewards Credit Card full review: should you get it?
The Capital One Quicksilver Secured Cash Rewards Credit Card is a no-annual-fee building credit card that offers unlimited cash back!
Keep Reading7 best ways to earn miles
Learn the basics you need to know about frequent flyer programs, how to earn miles, and make your next trips for little or nothing!
Keep Reading