Inflation is rearing its ugly head in America.
Gasoline prices are up 56.7 percent. Pre-owned cars and light trucks are 37.9 percent more expensive than they were a year ago. Car insurance is up 16.9 percent.
Food and rent also cost more than they did 12 months ago. With energy prices rising, the same is true of utilities.
All this means many Americans are forced to spend a higher percentage of their income on things they need just to get by.
High Food Prices Will Be Here a While
One nutrition policy expert says food prices have gone up “substantially” in the past year. The cost for food eaten at home has gone up 3.7 percent from last year. That’s more than double the average annual increase.
Phil Lempert is founder of SupermarketGuru.com. He predicts that higher food costs are here to stay for a while.
“I think food prices are going to continue to increase for probably a good year, year and a half,” he said. “Our costs are going to go up for food production.”
Due to the need for food transportation, the increase in oil and gas prices has also bumped food prices up. Just in the past month gas prices have soared by about 18 cents per gallon.
Bacon, Beef and Bread, Oh My
Here are some specific examples of rising food prices. The average price of a lb of bacon in January 2020 was $4.72. Now it’s $5.11. A lb of ground beef rang up at $5.02. Now it’s $5.26. A loaf of bread was $2.44, but now it’s $2.66
Those might not seem like huge increases. But they all add up by the time you reach the cash register. And these prices continue to rise.
Adding to the problem for shoppers is the scarcity of sales. A smaller percentage of items are being offered with promotions and coupons.
And it doesn’t help that there are still millions of people out of work due to the pandemic.
The ‘Why’ Behind Inflation
Why are prices for just about everything going up? I’ll let the economists wrestle with that one. But one of the big problems is the logjam created in the world’s supply chain by the COVID-19 pandemic.
Even if the pandemic disappeared today, there would be long-term consequences from the 2020 drop in global shipping. It’s the first time that’s occurred since 2009.
Those logjams result in more demand than supply. And that always means higher prices. Especially for food and oil.
The increase in the number and severity of storms has had a negative impact on planting timelines and crop yields. Crowded conditions for agricultural laborers resulted in sick workers. And that slows production.
In addition, government subsidies for corn production for biofuels take some corn out of the food supply. More than one-third of the U.S. corn crop is used to make ethanol. That means less corn to eat and higher prices.
Going in Debt Just to Eat
So, how are Americans handling the growing inflation rate? Unfortunately, many are going in debit – or further in debt – just to pay for necessities such as food.
Families earning $30,000 to $70,000 annually are already spending between 25 and 33 percent on food, rent and utilities. That’s according to data from the Bureau of Labor Statistics.
That percentage jumps to 47 for families earning $15,000 to $30,000. And for those earning $15,000 or less, the percentage leaps to 116.
According to the U.S. Department of Agriculture, some of the poorest Americans spend 36 percent of their income on food alone.
‘It’s a Disaster’
Families who have to borrow money to pay for necessities could be hurt for years. Even if inflation drops in the near future.
Another serious issue with inflation is that some families are forced to purchase less expensive food than they normally would. And that means they get less nutrition.
Geri Henchy is director of nutrition policy at Food Research & Action Center. She said, “The impact for low-income people is they have limited budgets.
“Which makes it that much harder to buy enough food. And it makes it that much harder to buy healthy food. It’s a disaster.”
Self-Sufficiency Is the Key
How does one reduce the amount of money they spend on food? The answer is pretty simple. But it does require time and effort.
Growing our own food in a backyard garden is the single best way to cut costs at the grocery store. It’s become crucial to do this as times become increasingly more challenging.
You won’t be able to grow everything you normally buy at the store, of course. But you can grow vegetables and fruits that can feed your family in-season and out.
And the best thing about growing your own food is you can use seeds from your current crops to plant for next year’s harvest.
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