Stockpiling is over, so why have grocery prices gone up again?
S E E D E D C O N T E N T
August was the second most expensive month for groceries this year, just slightly behind May's peak pricing, according to exclusive Nielsen data.
During the initial lockdown period when consumers stocked up for expected weeks of quarantine, they depleted shelves, and supermarkets and manufacturers struggled to keep up with demand.
But now, with long lines gone and essentials such as soap and toilet paper readily available, consumers may be surprised to find they are still paying lingering high prices.
The national average for a basket of 20 representative goods peaked at $138.78 in May, then fell in June and July to $136.40. In August it shot back up to $138.63.
While some individual items are less expensive than in May, they're still up from January, particularly meat. A pound of bacon costs 50 cents more; ground beef, 40 cents; and chicken breast, 30 cents.
The hikes are more acute in certain pockets. Miami is paying a dollar more for chicken, a nearly 30 percent increase; while Los Angeles is paying 60 cents more, a 20 percent increase.
"Promotions offered to consumers continue to be suppressed below their pre-COVID-19 levels for the fifth straight month," Phil Tedesco, director of retail analytics for Nielsen, told NBC News. "August saw a dip in this crucial metric from July, which is what has caused this month to be more expensive than in recent months."
Usually about one-third of items sold in a grocery store are offered with some kind of price reduction or promotion, but in August only 26 percent were, down a half point from July.
"This means deals and offers to shoppers are less available, driving up the cost of the same basket of groceries," Tedesco said.
Food makers say the disappearance of deals is all just basic economics working themselves out.
"Volume is up significantly, so manufacturers/brands haven't had to use promos to hit volume targets," tweeted John Vermylen, vice president of operations at Banza, a pasta maker.
"So basically [it's] a short-term supply constraint in terms of [supply and demand] curve, markets working normally," he wrote. Vermylen declined a request for comment.
Academic discussions about the invisible hand of the market may ring hollow for families and communities grappling with the twin forces of historically high unemployment and the disappearance of federal unemployment benefits amid a weakening jobs recovery. Senate Democrats on Thursday blocked a "skinny" relief bill with a $300 weekly cap on federal unemployment benefits, as the stalemate over emergency fiscal aid continues.
Erik Hembre, Assistant Professor of Economics at the University of Illinois at Chicago, estimated that if food price increases remain over the course of the next year the average household will spend about $400 more on groceries. Less well-off households will spend $210 more, but it will hit their budgets harder.
"Recent increases in food prices during the pandemic affect lower income households more because they spend a greater share of their income on food at home," Hembre said.
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Inflation is a real bummer for all of us and just recently the Fed decided to attempt to allow inflation to raise to even higher levels. Funds in safe investments are losing purchasing power to inflation with these near zero interest rates and the real rate of inflation is higher than the government reports because they don't include everything in the CPI index.
NPR talks about the inflation here. I found this to be of more value to me than the NBC article.
This article talks about the Feds change of policy.
I just got back from the store as my 3 month food stock was getting very low. I paid 90 dollars which 6 months ago would have been around 60 dollars. I eat very little these days so what I do get lasts awhile. My daily protein drinks are even going up in cost. Things like milk and eggs I do have to shop for a little more often though.
Meat processing plants shut down because of the virus. Getting anything butchered is a real chore in my area, with some traveling over 200 miles, with over a 6 month waiting period. Price of butchered beef has gone up as a result. Price of beef cattle, on the other hand, is down.
I sure am glad now that i took advantage of my fathers wisdom and knowledge , he was a butcher for 50 years , and he made sure , i learned how to process my own meat. granted its not processed in USDA fashion , but thats not my concern since whatever i process , is strictly for my own personal consumption.
the knowledge he imparted can never be taken away from me , after his passing , i inherited the tools he used in his trade , that he accumulated over the years , down to the steel rails and rolling meat hooks to hang the sides.
Never processed beef, but I've done my fair share of deer and elk.
Thats what I lack, and why I'd be hesitant to take one on...unless I was in a real pinch.
Farmers are desperate to get rid of them. They eat a ton.
Meat prices here have soared.
I can give you an educated guess.
it has nothing to do with the availability, it has everything to do with the availability to SHIP/ transport.
the trucking industry suffered a major decline in available drivers ( drivers retiring/ getting off the road due to situations , the virus can be factored into those situations).
even though a majority of food suppliers use contracted drivers and transport companies , if there is a greater demand the drivers on what some would call the spot market( available non contracted ) can pretty much set the rate for what they haul.
increased shipping costs to insure product availability will usually be passed on to the consumer . that is a no brainer.
In the past year i can think of at least 6 regional transport companies that have gone out of business , and this was before the pandemic. the drivers they employed , were not out of work long , but they simply are not driving in an OTR capacity any more or have found other jobs more to their liking.
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The stockpiling isn't entirely over, IMO. I can still only buy one package of paper towels or toilet paper at Costco. Since I can't buy disinfecting wipes from my suppliers for work, I'm using a lot of paper towels to wipe down surfaces with spray disinfectant. Disinfectants are harder to find, too - I can find them, but not the brands I prefer.
As far as groceries - there are still occasionally some bare shelves. A few weeks ago at Walmart, there were several freezer cases that were completely empty.
People are worried about another shutdown, and many of them are trying to stock up on staples a bit at a time. Manufacturers and retailers know folks will pay, so they don't have to offers markdowns.
Another thing i have been hearing around the farmers markets here is there is a shortage of home canning jar lids , they are next to imposable to find here in any size or quantity.
I've heard the same. During the shutdown, people decided to garden in their spare time, to save money on groceries and make up for not being able to find things in grocery stores, or to minimize trips to the store for perishables. So they had to can their harvests, and bought a lot of canning supplies. The rings for canning jars are reusable, but the lids are not, so people have jars and rings, but lids are in short supply.
yeah i dont can , likely should , but its not a priority with me at the moment . right now im getting an over abundance of boneless chicken dinners from my pullets averaging about 4 a day. sometimes 5.
My garden isn't big enough to produce enough for canning. I get salad fixin's and some strawberries out of if for part of the summer, and that's about all.
my garden this year went kaput, late and early freezes , little to no rain even with irrigation rights out of a canal , i pulled it all about a week ago except some zukes and potatoes , got a very full pickup bed of manoodler and now have it turned in for next years garden .
gardening has been hit or miss up here , either got nothing , or got bumper crops .I got nothing really.
thankfully i have chickens ( eggs ) , a pig whom is destined to become bacon and sausage , chops and a couple loin roasts , and a heifer that im now fattening up with grain in about a month , it to will be in the freezer.