If you’re concerned about the long-term impact of world events on your grocery bill, you should be. New data indicates there could be some serious changes in the very near future.
While many analysts are arguing about the economy and the stock market, households are likely to see some changes closer to home. Grocery prices, most specifically meat prices, are in for some changes — and they may shift the argument towards every day expenses.
Grocery Prices as an Indicator of Economic Health
Grocery prices in the United States overall are quite low; food, in general, is affordable. But grocery prices nevertheless have a profound impact on the average household because they are non-negotiable: households have to purchase groceries.
When grocery prices go up, the economy tends to stagnate because there is less disposable spending. When grocery prices go down, money is more likely to circulate on a local level, rather than going to large, national grocery chains.
Meat Prices Continue to Rise
Meat prices are going up, and it’s not a surprise to anyone who has been following the news. Major plants such as Tyson were forced to close down due to COVID, and many animals had to be destroyed rather than being properly processed as a direct result.
Grocers are also still limiting purchases because there are fewer products out there, and some (in high cost areas) are finding that fake meat products such as Morningstar and Beyond Meat are now cheaper than actual meat.
But it’s not just meat that’s going up, it’s groceries in general. In part, it’s supply chain disruption. It’s also hoarding. And it’s also groceries being more in demand as people are cooking at home more frequently.
The food is there, but the supply chain itself is not. There are fewer people available to actually deliver the food. There have been farms destroying their entire yield because they simply had no place to put it.
The Long-Term Consequences May Be Minimal
It’s likely that food prices are going to stabilize again after the pandemic. But “after the pandemic” could mean anything. Arizona is now closing down Phoenix restaurants again after a resurgence of COVID-19, which means the country as a whole could be in for a second lockdown sooner than it thinks. While the pandemic remains, it’s likely that food prices are going to continue to rise, simply because it’s become more expensive to process and distribute food.
The minor increases in grocery and meat prices aren’t enough to truly damage most households, but it is going to be a shock to some of the people who grocery shop frequently… and it is something that people should consider as unemployment stretches on and the economy continues to falter. For those with an eye on the bigger picture, agriculture and meat packing is going to be an industry to watch. The dairy industry has already been suffering for some time, as people move away from milk products.