Why are food prices so absurdly high and what could be done to fix this?
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Everybody wants to eat, supply chain is still messed up from COVID after-effects, and raw material prices are way up. Demand exceeds supply so prices go up.
Prices may come down some, or not climb as fast, as supply catches back up, but if raw material prices (oil, mostly) stay high then that’s going to roll through to food for a long time.
Supply and demand. Only and always. Prices rise if any only if there are enough buyers willing to pay the increased prices. And as long as there are such buyers, prices will increase and remain high. The only way to reduce prices is to reduce demand. Period. Nothing else will work. Obviously, we can’t reduce demand for all food across the board, but we can as individuals change what we eat and where we procure food in response to market signals (i.e., prices). Local supermarket price too high for chicken breasts? Maybe another market or a “superstore” will have better pricing. Maybe skip chicken breasts this week – try thighs or maybe another (cheaper) source of protein. Buying pre-made meals too expensive? Maybe switch to purchasing the ingredients and cooking from scratch. Etc. But unless we collectively change our food purchasing habits, prices won’t drop unless there’s a glut of one food product or another (but that works its way out of the economy quickly and then things return to the way they were).
In my country(Australia). It’s because there is a lack of competition and the supermarkets are inflating the prices to make record profits.
Interesting to see people claiming “supply chain” while companies of all sorts are posting record profits.
If prices for consumers only rose to cover the increased cost of supplies, you would expect to see little to no increase in net profits.
The fact of the matter is a lot of prices are increasing because companies haven’t yet hit the point at which consumers opt to not purchase (which admittedly is harder to do for things like groceries than luxuries).
Price gouging.
All the grocery stores that are crying about supply chain issues driving up the cost of food because of the pandemic are now reporting record profits.
So the real answer, whatever anyone tries to tell you, is price gouging.
In addition to what’s being said:
The west has lived for decades on the cheap labour of other countries. Nowadays, citizens of those countries are, slowly but surely, asking and getting fairer wages.
First world countries are discovering the true prices of things.
All the food was planted when diesel and fertilizer where at there peak. So high input cost caused high sell cost.
Anecdotally I think prices for many items stayed suppressed for years. I feel like retailers used Covid or something that occurred at the same time as an excuse to raise prices that they’ve been wanting to do for years. I buy a lot of diet soda and I honestly don’t recall the price of a 2 L bottle of soda changing that much in the 10 years prior to Covid. Since Covid, though, we’ve seen prices go up multiple times and we seem to be settled in at about $2.99 a bottle. I have a feeling those prices will stay there for a long time until the next reset.
Because too few people control the food supply for too many people. There are probably a dozen other reasons, but I’d probably put this at the top.
To fix (Probably not fix. Maybe impact.) this, we could change regulation to allow locals to feed each other for profit again encouraging local small farms, cutting out the cost of transportation, storage, shelf time, grocery store contracts, and plenty of other things. There would be greater risk in eating food from a less-regulated supplier, but at least the massive food companies would have competition again.
Until it’s fixed, or in case it’s never fixed, I recommend buying bulk produce (especially if you have a farmers market nearby) and learning to can your own food. Learning to store rice, beans, flour, and other staples can really help too: it’s not about storing up for the end of the world (though that is a nice side-effect), it’s about being able to buy things in bulk and be more mindful of your food. A deep freezer can help a ton here if you can find cheap meat for stews and such. Baking your own bread can also save you a ton of money depending on how much of it you eat, and plenty of people see positive health changes when they stop eating pre-sliced grocery store bread. Remember, it’s primarily ready-to-eat food that’s spiked in price, and only a few generations ago that was a luxury.
Edit: If you start canning, beware of botulism. It’s a toxin that lives in dust and can get into your canned food and grow there. It is very easy to get if you can the wrong foods and can them poorly.
According to some stats, there are fewer than ten cases of foodborne botulism in the US per year, few of which are fatal. Most overall botulism cases are from infants putting dirt in their mouth, from injury, or from consuming raw honey, but it can still absolutely ruin your day via poor canning. By killing you. Do your research. When you look this up, make sure you look up “foodborne botulism” or else you’ll get scary unrelated numbers and bad advice.
I am a farmer, and my prices have increased because every piece of equipment we have runs on diesel fuel. I’m not making more money, just paying more for fuel and fertilizer. Want the cost of food to go down? Lower the cost of energy.
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