Food and Wholesale Prices Rising Yet Again as We Approach the End of 2021
Inflation spike: U.S. wholesale prices keep surging as we approach the end of 2021, and we have yet to see what the following year holds in store for the food industry.
On top of many staple items – including mushrooms – getting scarcer and scarcer, you might have noticed a significant (and rising) spike in how much you spend on groceries and food ingredients at the end of each month. And you’re not wrong on that. As of October 2021, U.S. wholesale prices rose a record 8.6% over 12 months, virtually impacting every business and supplier in the food industry.
And it’s not just the U.S.
Far from being localized, the spike in food and wholesale prices is an issue that has long transcended national borders. Global food prices hit a fresh 10-year high due to inflation, BBC quotes the U.N.
Numbers have surged worldwide after years of subdued inflation. As many economies have disposed of their more extreme COVID-19 restrictions, they have also triggered bottlenecks and supply chain shortages. Moreover, with winter just around the corner, prices for natural gas, coal, petrol, oil, and other fossil fuels have seen an unprecedented spike.
What Fuels the Food Prices Inflation?
According to A.P. News, almost 80% of the overall increase in wholesale prices last month was attributed to a 1.3% rise in the price of goods—the most significant we’ve seen since May.
And, as we have gotten used to hearing, rising costs, raw material shortages, snarled supply chains, and generalized lack of workers continue to power the food industry crisis. In particular, suppliers still face considerable difficulties finding truck drivers, and costs for refrigerated transport continue to go up.
As a result of this widespread havoc, we see fewer and fewer suppliers for items like milk, butter, soda, snacks, mushroom, meats, baking goods, and much more. Under pressure from the shortage economy, producers are unable to keep up and demand has dramatically outstripped supply.
We’ve also begun to see other worrisome trends. As fewer items reach grocery shelves due to insufficient processing and transportation capacities, pandemic-fueled fear pushes consumers to hoard food.
Will Food Prices Continue to Rise in 2022?
Restaurants are once again falling victim to recurrent delays and shortages, but is there any chance of things getting better throughout next year? According to AGNet, high food prices should ease a bit in 2022.
However, we have yet to see if this will bring a noticeable relief to restaurants, bars, and similar venues, considering there is still no clear solution in sight to the lack of drivers, workers, and rising wage rates. As a result, Washington Post warns consumers that prices may remain high in restaurants and other food-away-from-home venues.