Higher food prices hit the poor and those who help them

New York, United States Published: Oct 27, 2021, 08:50 PM(IST)

File photo Photograph:( Reuters )

Story highlights

While overall consumer prices in September were up 5.4 per cent from a year ago, the cost of meat is up slightly more than that. Prices of staples like dairy products, fruits, grains and oils are also rising

With food prices surging, many Americans have found their household budgets upended, forcing difficult choices at the supermarket and putting new demands on programs intended to help.

Food banks and pantries, too, are struggling with the increase in costs, substituting or pulling the most expensive products, such as beef, from offerings. What’s more, donations of food are down, even as the number of people seeking help remains elevated.

Even well-off Americans have noticed that many items are commanding higher prices, but they can still manage. It is different for people with limited means.

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“Any time someone is low income, that means they’re spending a higher percentage on needs like food and housing,” said Diane Whitmore Schanzenbach, director of the Institute for Policy Research at Northwestern University. “When prices go up, they have less slack in their budgets to offset, and they are quick to fall into hardship.”

Before the run-up in prices — driven by supply chain knots and rising labour costs — Robin Mueller would buy ground beef for meatloaf or hamburgers to serve once or twice a week for her family in Indianapolis. Now she can afford to cook it only once or twice a month.

“You have to pick and choose,” said Mueller, 52, who is disabled and lives with her daughter and her husband. “Before, you didn’t have to do that. You could just go in and buy a week or two’s worth of food. Now I can barely buy a week’s worth.”

She has turned to food banks in Indianapolis for help, but they, too, are feeling the pinch.

A case of peanut butter that was $13 to $14 before the pandemic now costs $16 to $19, according to Alexandra McMahon, director of food strategy for the Gleaners Food Bank of Indianapolis. Green beans that used to retail for $9 a case now sell for $14.

“It has a big impact,” said Joseph Slater, chief operating officer of Gleaners. “It's on our minds, and it’s on the minds of our hungry neighbors as well.”

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In New York, Tynicole Lewis and her daughter, Lanese, depend on food stamps, but Lewis said that the aid runs out well before the end of the month now. Lanese is diabetic, and Lewis serves as much protein and vegetables as possible — foodstuffs that have become especially pricey.

“Food is expensive, and when the food stamps are gone, they’re gone,” said Lewis, who lives on the Lower East Side of Manhattan and earns $12,000 a year as a grocery store worker. “I have to wait.”

She, too, depends on food pantries and has given up buying meat for the most part. “I eat a lot from the pantry, whatever they get,” Lewis said. “I like fish, and I’ll treat myself when I get the food stamps.”

While overall consumer prices in September were up 5.4 per cent from a year ago, the cost of meat is up slightly more than that. Prices of staples like dairy products, fruits, grains and oils are also rising.

Prices of meat, poultry, fish and eggs in US cities are up 15 per cent since the start of 2020, according to the Bureau of Labor Statistics.

The run-up in costs at the supermarket comes even as gasoline prices have risen and natural gas and heating oil prices are predicted to be higher this winter, putting further pressure on those with low incomes.

In addition, the mammoth assistance programs rolled out by the federal government in response to the pandemic in 2020 have largely lapsed. While some households built up savings from government payments, others have little room for extra expenses.

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The forces behind higher food prices have been building for some time and aren’t going away anytime soon, said Michael Swanson, chief agricultural economist at Wells Fargo.

“People are shocked, but this is a slow-motion train wreck,” he said. “The scary thing is that food companies haven’t passed along all of their costs yet.”

Higher transportation and warehousing expenses lead the list of causes, along with rising labor costs at meat processing centers and other nodes in the food supply chain.

To be sure, there are some winners as a result of the cost squeeze. While meat prices are up sharply for consumers, prices for cattle and other livestock haven’t moved as much. The result is buoyant profits for beef processors, Swanson said.

“This is not going to go backwards anytime soon,” he added. “As soon as producers and retailers get these price increases, they are very sticky.”

Behind the scenes, logistics expenses have jumped even more sharply than prices for foodstuffs, along with the costs of unglamorous items that few gave much thought to a few years ago.

A refrigerated truck shipment from California to New York that cost $2,500 to $3,000 before the pandemic now goes for $10,000, according to Swanson. Big wooden pallets used to move meat or vegetables that sold for $7 to $9 are now priced at $25 to $30 apiece.

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The recent trend reverses a decade of relatively low food price inflation, Swanson added, a period in which many Americans got used to buying ample supplies of beef, chicken, turkey and fish. Now that is more of a challenge.

“We do a lot of pasta and beans,” Mueller said. “It’s a lot cheaper. I miss making big meals, but it’s too hard price-wise.”

For food banks, more expensive meat and produce has stretched budgets even as the number of people seeking help has increased. At the Oregon Food Bank, which distributes food to partners across Oregon and southwest Washington, 1.7 million people sought assistance in 2020, compared with 860,000 in 2019, said Susannah Morgan, the group’s CEO.

Recently, demand has abated somewhat, but things are nowhere near pre-COVID conditions. While the number of people coming for help in Oregon will probably be closer to 1.3 million this year, “the need is still ridiculously high,” Morgan said. “Your dollar goes less far in a grocery store.”

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