Are Food Costs Lower?

With the general election coming up in a couple of months, the price for food is a big issue. Most people say the high prices are unfair, but they keep rising.

Since the start of the pandemic, some companies have taken advantage of consumers, raising prices while simultaneously shrinking the size of the package and its contents. Some have kept the size of the package the same, but the contents inside are less.

They must have gotten this idea from the U.S. Post Office, as they have also been raising prices for less service and longer delivery times. This doesn’t have anything to do with food, but it is a trend against consumers. Is this because of inflation or the cause of inflation?

Early last August, I read a report stating, “Food inflation expectations and estimates both dropped last month to lower levels since January 2022,” according to the July 2024 issue of the Consumer Food Insights Report.

This survey-based report came out of Purdue University’s Center for Food Demand Analysis and Sustainability and assesses food spending, consumer satisfaction and values, support of agricultural and food policies and trust in information sources. Purdue experts conducted and evaluated the survey of some 1,200 consumers across the country.

I think they should have used more people as 1,200 consumers is not a lot, but it probably does reflect the nation’s feelings.

In the past year, the consumer price index (CPI) measure of annual food inflation remained the same at 2.2 percent for the fifth month in a row for the year. The consumers’ estimate of food inflation came back at 5.4 percent, which was higher than the CPI estimate, but a decrease from the month prior. The consumers also expected food prices to be 2.3 percent higher in the 12 months after the survey.

An interesting result of the survey showed the insecurity rate dropped slightly to 11 percent, which showed close to one-third of low-income households – those earning less than $50,000 – are food insecure.

The report showed food security decreasing, which makes the seventh straight month it has remained below the 2023 average of 14 percent. 

But we all realize food insecurity is substantially higher for low-income households who are not able to purchase higher-quality foods such as food from a farmers’ market. A number of higher-income households surveyed said they tried to visit a farmers’ market at least twice a week.

It is going to be interesting to see what food prices do in coming months, as corn, soybeans, sugar, cocoa and wheat prices are becoming lower around the world. Some are saying “the market remains in an era of abundance.” 

While the war in Ukraine seems to be getting bigger, commodities like corn, wheat and soybeans are still being exported by Ukraine and Russia. Recent reports show Ukraine is exporting over five million tons of grain per month, higher than in 2023. These numbers are lower than what the country was exporting before the invasion by Russia.

I hope whoever wins the presidential election doesn’t raise tariffs with countries like China. The last time it happened, China targeted the U.S. agriculture sector and it hurt.