En español | According to the U.S. Bureau of Labor Statistics (BLS), inflation is low. Prices, however, have been climbing in at least one sector: food.
The Consumer Price Index (CPI), which measures the cost that Americans pay for a broad array of goods and services, has risen just 0.6 percent over the past 12 months, primarily because energy prices have tumbled 12.6 percent. The food component of that index, though, has jumped 4.5 percent during the same period, and prices for food consumed at home have increased 5.6 percent.
Among the items that have seen the biggest price hikes in grocery stores are:
- Beef and veal, up 25.1 percent
- Eggs, up 12.1 percent
- Pork, up 11.8 percent
- Poultry, up 8.7 percent
The rising prices of meat and eggs have been offset, somewhat, by relatively tame inflation for fruits and vegetables, the cost of which has ticked up 2.3 percent, according to the BLS. Even so, some vegetable prices have jumped, too. Potatoes have soared 13.3 percent in the past 12 months, and tomatoes have risen 8.4 percent.
There are three main causes of the rise in food prices, and all are tied to the COVID-19 pandemic. The first is demand. People are stocking up on food because they want to limit their trips to the store. Demand has been so high that companies that handle food processing and distribution are among the few that are hiring right now, says Mark Zandi, chief economist at Moody's Analytics.
The second reason is the shift from eating in restaurants and schools to eating at home. “We have a very delicate national food supply chain that assumes that we all adhere to our normal seasonal dining patterns, and that was shaken up by these big changes,” Kim Rupert, managing director of Action Economics, observes. For example, distributors have to switch from packaging milk in half-pint cartons for schools to the gallon and half-gallon containers that people prefer at home. That takes time, drives down supply and increases prices.
Finally, there's the disease itself, which forced the closure of several meat processing plants earlier this year. Many of those have reopened, but they have to provide greater protections for their workers. In Michigan, for instance, Gov. Gretchen Whitmer directed companies to modify their processing lines to minimize the number of employees inside a facility during a shift.
The U.S. Department of Agriculture expects food prices to decline next year, as production could return to relatively normal levels. The USDA forecasts a 1.5 to 2.5 percent decrease in the cost of beef and virtually flat egg prices.
Easing the price pain
Food is a big part of household budgets, so high prices can upset household finances. To some extent, declines in the cost of other necessities may offset rising food prices. The national average price of a gallon of unleaded gasoline, for example, is $2.187, according to AAA, down from $2.750 a year ago, and most people aren't driving much during the COVID-19 pandemic. Other prices are down, too. “Airline fares are down 27.2 percent year over year, and car insurance is down 10.1 percent,” Rupert says.
When prices rise for a particular product, people usually switch to a more affordable option. So when beef is expensive, chicken is what shows up on the grill. When egg prices soar, cereal is what's for breakfast.
Still, you can grill many vegetables, but not everyone is willing to go vegetarian until meat prices decline. With that in mind, here are some suggestions for trimming your food budget.
- Buy in bulk. Prices usually fall with larger amounts, provided you have the money to buy a family-sized package of ground beef. Just freeze what you don't use.
- Trim it yourself. You pay extra for cuts of meat that have been trimmed, spiced or formed into patties.
- Buy cheaper cuts. Instead of fillet mignon, purchase sirloin tip center steaks or top round steaks, the Cattleman's Beef Board advises. For more flavor and tenderness, marinate the cuts before grilling them.
- Find a good butcher. A meat merchant will usually know the most flavorful and cheapest cuts and can help you if you tell him your price range.