Led by meat, grocery prices are rising rapidly, up 11.9 percent in the past 12 months — even faster than the overall U.S. inflation rate of 8.6 percent, said the government in the Consumer Price Index report. "We're going to live with this inflation for a while," said President Biden over the weekend, despite administration efforts to reduce prices.
Sharply lower prices for palm, sunflower and soybean oils helped pull down the Food Price Index marginally from its record high that followed Russia's invasion of Ukraine, said the UN Food and Agriculture Organization. Grain prices also fell during April while meat, dairy and sugar prices rose.
The chief executives of the nation’s four largest meatpacking companies said on Wednesday that they were not the cause of surging meat prices at the grocery store, which are up by 15 percent in a year. And they told a skeptical House Agriculture chairman David Scott there was no pact to drive up profits at the expense of consumers or limit the meat supply for Americans.
Grocery prices will rise by an average of 5.5 percent this year, the highest inflation rate at the supermarket since 2008, said the Agriculture Department on Monday. The forecast was an abrupt 2 percentage point increase from last month and was spurred by three months of rapid rises in the prices of many foods.
The chief executive officers of Cargill, Tyson Foods, JBS, and National Beef — the four largest meatpackers in the country — will testify at a House Agriculture Committee hearing on consolidation in the meat industry, said chairman David Scott.
The food inflation rate is up for the ninth month in a row and now matches the U.S. inflation rate of 7.9 percent a year, with double-digit increases in the price of meat, milk, and fresh fruit, said the government on Thursday. Prices for groceries rose even faster, 8.6 percent, than the overall food index, which includes food sold at restaurants, fast-food outlets, and company cafeterias.
Food prices are rising at a faster and faster rate, reported the Labor Department on Thursday. Food inflation, a modest 2.2 percent a year last May, started 2022 at a 7 percent gallop, the eighth month in a row the rate has gone up.
In the first Consumer Food Insights survey, Americans were six times more likely to blame higher meat prices on pandemic-related shutdowns than to blame meatpackers, who the Biden administration blamed. Some 51 percent of respondents said Covid-19 shutdowns were the cause, compared to 8 percent who chose concentration and market power of meatpackers, according to the survey by the Center for Food Demand Analysis and Sustainability at Purdue University.
Although the White House blames big meatpackers for driving up food prices, the real culprits are higher costs and labor shortages all along the supply chain, said a pork industry report on Wednesday. Four packers control 65 percent of hog slaughter in the United States, but the industry is less concentrated than it was five years ago.
Beef and pork prices are going up again this year but the increases will not be as severe as last year, said the USDA on Tuesday. The monthly Food Price Outlook reported that beef and pork prices would rise by 3.5 percent for the year, and that "Upward pressures on meat prices are expected to ease in the latter half of 2022."
While supporting more transparency in cattle prices, the American Farm Bureau Federation draws the line at requiring meatpackers to buy slaughter cattle on the cash market, said president Zippy Duvall. Mandatory purchases are a prime feature of the leading Senate bill for cattle market reform.
President Biden is getting bad advice in painting the meat and poultry industry as a villain behind sharply higher grocery prices, said the president of the National Chicken Council in an essay published on the chicken-raising Delmarva Peninsula. "This administration has chosen to put politics above protein," wrote Mike Brown, the trade group president.
Acknowledging "we need to get inflation under control" as part of the economic recovery from the pandemic, President Biden said on Wednesday that the administration will inject competition into the highly consolidated meat industry to bring down prices at the grocery store. Meat prices soared by 14.8 percent during 2021, part of overall food inflation of 6.3 percent.
Meat prices fell in the final weeks of 2021, but food inflation climbed again, to an annual rate of 6.3 percent, said the Labor Department on Wednesday. The overall U.S. inflation rate of 7 percent for the past 12 months was the highest since June 1982.
World food prices soared by 28 percent during 2021, according to an index based on five major commodities, including cereal grains, meat, and sugar, said the UN Food and Agriculture Organization on Thursday. The abrupt increase, as the world recovered from the economic collapse that accompanied the pandemic, ended five years of relative stability in the Food Price Index.
Pushed by high meat prices, the Food Price Index will surge by 3.5 percent this year, its largest increase since the 5.5 percent rise in 2008, said the USDA on Tuesday. Food prices typically rise about 2.4 percent a year.
Grocery prices are climbing at their fastest pace since 2008, with beef, pork and poultry leading the way — up nearly 13 percent since last November, said the government's new inflation report. The White House pinned the blame for surging meat prices on meatpackers "taking advantage of their market power to raise prices while increasing their own profit margins."
Strong consumer demand for meat and labor shortages at packing plants were factors in persistently high meat prices this year, said the USDA on Tuesday in a monthly report on food inflation. Meat prices were forecast to climb by 6.5 percent this year, double its long-term average of 3.2 percent annually.
Beef prices were 12 percent higher than a year ago, helping to drive overall food prices upward, said the Labor Department on Tuesday. The monthly Consumer Price Index report said food prices were 3.7 percent higher but the U.S. inflation rate slowed slightly in August.