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5 Supermarket Staples With Big Price Increases

These everyday grocery items have surged in price since last August

spinner image Overhead view of a dining table as two pairs of hands holding knives and forks dig into plates of breakfast.
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Food prices have soared 11.4 percent over the 12 months ending in August, according to the U.S. Bureau of Labor Statistics (BLS), meaning that budget-conscious shoppers have had to buy less of more expensive foods — or do without them.

The U.S. Department of Agriculture (USDA) forecasts that food prices will rise 2.5 percent to 3.5 percent in 2023. Over the past 20 years, food prices have increased an average of 2.4 percent annually.

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Currently, however, food price increases are taking a big bite out of your wallet. Here are five items, in particular, that are consuming your food budget.

1. Milk

Pretty much any food derived from cattle has risen in price, and milk, up 17 percent in the past 12 months, is no exception. The cost of corn is a big factor, but so is the cost of labor.

U.S. dairy farming is mainly a large-scale industrial operation. Since 2003, the U.S. has lost more than half of its licensed dairy operations (which now number just shy of 32,000), according to the USDA. Most of them were small family dairies.

Mega-dairies with herds of 1,000 to 20,000 cows provide most of the milk in the U.S. The average dairy worker earns $13.33 an hour, according to Zippia, a job recruiting company. The dairy industry relies heavily on immigrant workers, and some states are pressing farmers to pay overtime or higher wages — which, in turn, get passed on to consumers. The USDA is predicting modestly lower milk prices in 2023, however, as the nation’s dairy herd increases.

2. Butter

You might want to put off mastering the art of French cooking this year, at least until butter prices soften a bit. Butter has jumped 24.6 percent in the past 12 months, according to the BLS. Thinking of switching to margarine? Think again: The butter substitute has gone up 38.3 percent in the past 12 months.

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Butter is the hardest hit of the hard-hit dairy component of the consumer price index (CPI) over the past 12 months. (The CPI measures the cost of a basket of consumer goods and services, and is the government’s main measure of inflation.) The COVID-19 shutdown of restaurants and other places reduced demand for milk and milk products, says Tom Balmer, executive director of the American Butter Institute, and the industry still hasn’t caught up with the rebound in demand.

In addition, butter tends to be the last in line for things to be produced from the milk supply. “These days, cheese is the big driver in total milk usage,” he says. That means there’s less butter to go around, giving sellers leverage to charge more for it. Nevertheless, if milk production increases as forecast in 2023, butter prices might churn lower.

3. Eggs

You’ve probably had your grocery budget scrambled if you eat a lot of eggs: Egg prices have gone up 39.8 percent in the past 12 months.

An outbreak of bird flu cracked the egg market in spring, and the nation’s chicken flock hasn’t entirely rebounded. Over 40 million birds in 36 states have been affected by the strain of avian flu, according to the USDA. The virus has a near 100 percent mortality rate.

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And chicken feed isn’t cheap: The price of corn, a major component of chicken feed, rose to more than $8 a bushel in April, according to Macrotrends. Prices have fallen by about $1 since then, but are still about $1 higher than they were 12 months ago.

4. Coffee

That morning jolt of joe is costing you 17.6 percent more than it did 12 months ago, the BLS says, and the main reason is that coffee isn’t grown domestically. Much of the coffee sold in the U.S. comes from Brazil, which had an exceptionally dry growing season. The World Bank estimates that global coffee production will increase 4.5% in the 2022–23 season, offering some relief from rising bean prices.

5. Bread

Your bread is rising, and it’s not just the yeast. The cost of a loaf of bread is up 16.2 percent since last August, and for that you can blame Russian President Vladimir Putin, at least in part. Ukraine and Russia produce about 28 percent of the world’s exported wheat supply, but the Russian invasion of Ukraine had halted much of the grain exports from the region. The price of wheat rose sharply after the Russian invasion, but it has fallen since the two countries agreed to allow Ukrainian wheat exports.

Energy costs are another reason the price of bread — and many other grocery items — has risen. As most drivers are painfully aware, the price of a gallon of regular gasoline, while down from record levels, has still climbed from $3.18 a year ago to $3.70 as of September 13, according to AAA. Most of the ingredients for bread arrive by truck, and the finished product reaches store shelves by truck as well.

You can’t make bread without bakers, and they, too, need more money to keep up with the rising cost of gasoline and groceries. Average weekly wages, adjusted for inflation, are down 3.4 percent, according to the BLS. If inflation continues at its current pace, you can expect workers to demand higher wages — which, ultimately, will increase the price of bread further.

John Waggoner covers all things financial for AARP, from budgeting and taxes to retirement planning and Social Security. Previously he was a reporter for Kiplinger's Personal Finance and  USA Today. 


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