Gasoline prices in the United States have been setting all-time highs nearly every day in the past few weeks. For the first time, the average price for a gallon of gas exceeded $4 in all 50 states, AAA data shows. On a nominal basis, this price was the all-time high price for gasoline.
Food prices were 9.4% higher in April 2022 than in April 2021 – the largest annual increase in 41 years, the Bureau of Labor Statistics reported. Grocery prices jumped 10.8% for the year.
The AgWeb farm journal reports the USDA raised its estimated range of 6.5%-7.5% y/y increase from a range of 5%-6%, according to the May Food Price Outlook report, the highest forecast for all food prices and restaurant prices since 1981, and the highest grocery store price boosts since 1980.
The biggest increase is eggs for the second month in a row, hiked to a 19.5%-20.5% range from a 6%-7% range. Just two months ago, USDA had egg inflation at 2.5%-3.5% y/y.
Other categories with big increases: pork, poultry, fats and oils.
USDA only kept their price increases steady from April for beef and veal (6% to 7%), fresh vegetables (4% to 5%), processed fruits and vegetables (5.5% to 6.5%) and sugar and sweets (5.5% to 6.5%).
While Americans grow weary of record high gas and grocery prices, however, another round of price increases is making its way through the food supply chain and is expected to reach consumers this fall.
“People don’t realize what’s fixing to hit them,” Texas farmer Lynn “Bugsy” Allen said. “They think it’s tough right now; you give it until October. Food prices are going to double.”
However, there are some regional disparities, especially in the South.
ClickOrlando reports the latest data from BLS shows gas prices have fallen a bit in the South compared to the rest of the country.
Across the country, bacon prices have risen over 18% in the last year. In the South in the last few months, average bacon prices have fallen about 30 cents.
The same things causing higher prices in chickens (increased feed and transportation costs) are also causing higher prices in eggs. Egg prices are up 11.2% over the last year.
The cost of a gallon of milk is one of those metrics politicians are asked to quote in an election year. Those prices have been on a steady increase since October.
Fresh whole milk has gone up 14.5% over the last year, while reduced-fat milk has gone up 12.8%.
Milk prices are at their highest since 2014, according to Dairy Herd Management.
In the Southern U.S., prices for white bread are relatively stable, but they have soared in other parts of the country.
White bread prices are up 5.9% over the last year. Higher fuel costs and the supply chain are part of the problem. Russia’s invasion of Ukraine has put a squeeze on global grain supply, and while the U.S. largely does not rely on wheat from that part of the world, it is causing a trickledown effect, reported ClickOrlando’s Christine Zizo.
“Nothing that consumers are paying is going to bridge the gap for farmers right now,” according to Lorenda Overman, a North Carolina farmer who raises hogs and grows corn, soybeans, and sweet potatoes. She said the spike in fuel costs has put her farm into the red this year.
“The prices now have not hit the grocery stores yet,” but she expects they will start to by the end of summer.
Much of the cost of food hinges on the price of oil.
“They have no electric trucks delivering that food and there are no electric tractors,” Allen said. “It takes diesel to run all this.”
Chester said fuel and fertilizer together make up 55 percent of his total costs. The price of diesel fuel has more than doubled, to more than $5 per gallon today from $2.50 per gallon at the end of 2020. Farmers say the cost of fertilizer, an oil derivative, has tripled and in some cases quadrupled.
“When you look at the machinery that uses diesel, it’s farm equipment, it’s railroads, and it’s truckers,” said Daniel Turner, executive director of the energy advocacy group Power the Future. Diesel “moves all of our goods, it grows our food. From cargo ships arriving from overseas to trucks or trains getting those goods across the country, all those things now have added costs that will get sent to the consumer.”
“That surge in food and energy costs is very demand-destructive for U.S. households,” said Joseph Lavorgna, chief economist at Natixis, a European bank. “If you have to pay a lot more money for your food, to heat or cool your home, or put gasoline in your vehicle to get to work, there’s less money available elsewhere,” wrote Kevin Stocklin in an article for The Epoch Times.
The White House knows all of this, but President Biden has continued to stand in the way of increased American oil production, with White House Press Secretary Jen Psaki saying the Biden administration is going to use this crisis to push Americans into "biofuels" and "electric cars" as an alternative option.
Lobbying the Saudis and doing deals with adversary states like Iran and Venezuela is not an answer to America’s energy needs. You can call Joe Biden at the White House at 202-456-1111 or email him through this link. Tell him thanks to his feckless foreign policy and destruction of America’s energy security America’s working families are suffering. If oil goes from $120 to $150 a barrel Americans will soon be forced to choose between food and fuel.
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