The good news is that the price of gasoline, clothing, car insurance, airline fares, and hotel stays have dropped. The bad news is that the price of your grocery bill is higher. The price of groceries went up in April by a monthly jump not seen for forty-six years.
The price of the items in the categories that dropped does not affect every consumer. Not everyone drives, or travels by air, or needs a hotel room. Everyone needs food. We can blame the coronavirus pandemic for this turn of events. I’ve noticed price increases, you probably have, too.
An increase in the price of eggs has been especially noticeable, as well as some shortages, too. At the end of March, the average price for a dozen eggs was $3.01. At the beginning of March, the price was 94 cents. This jump seems to have led the way. One item isn’t a crisis, even with something as necessary as eggs for the home cook. Supermarkets were increasing their normal orders to stock their egg cases because of consumer demand. This was actually good news for egg producers who experienced a money-losing year last year.
The short supply is expected to last a while, though. It takes up to five months to raise a hen to its egg-laying age. It is not anticipated that farmers will expand their flocks. Eggs are an inexpensive source of protein and a staple in kitchens. Grocers say it is hard to ask customers to pay more for eggs but costs are going up and they are losing money on eggs.
Anthony Hucker, chief executive of Southeastern Grocers, said: “Egg is by far the steepest and the fastest in terms of the speed of increase.” Prices are the highest they have been since the avian influenza of 2015 and supply is likely to get tighter, said Mr. Hucker, who heads the chain of more than 700 stores that includes the Winn-Dixie and Bi-Lo chains.
Randy Edeker, president of Midwest grocery chain Hy-Vee Inc., said it is hard to ask consumers to pay more for eggs and other protein as the pandemic drives people to stock up. Eggs have long been a cheap source of protein for low-income families, food-industry officials said.
“Costs are going up right now,” Mr. Edeker said. “We’re just going to have to lose money on eggs.”
Lincoln, Neb.-based B&R Stores Inc. is selling a dozen eggs for $2.48, though the chain is paying $2.93, up from 98 cents two weeks prior. Some products are also increasing in price, but not as much as eggs. B&R’s wholesale price of ground beef increased by 25% or $1 higher per pound, and chicken and pork prices went up by roughly 15%.
“We’re all selling eggs below market price. On a staple item like eggs, there are times when you make money and times when you lose money,” said Mark Griffin, president of B&R Stores.
So, with short supplies of eggs developing and their prices rising in March, it probably shouldn’t be a surprise that other prices have now risen. It is surprising, though, the intensity of price increases. Maybe price increases aren’t so noticeable on one or two items but increase food items across the board in several categories and it all adds up by the end of a shopping trip. Add an increase in grocery prices to the stress already felt by millions of newly-unemployed workers due to the economic shutdown brought by the coronavirus pandemic and its not what families need now. Following eggs in price increases were other sources of protein – meats, poultry, and fish.
U.S. consumers paid 4.3 percent more in April for meats, poultry, fish and eggs, 1.5 percent more for fruits and vegetables, and 2.9 percent more for cereals and bakery products, the Labor Department said.
Overall, consumers paid 2.6 percent more in April for groceries, the largest one-month jump since February 1974.
The jump in food prices came in a month when more than 20 million Americans lost their jobs, driving 1 in 5 households into food insecurity.
The increase in food prices was in marked contrast to a broader decline in the basket of goods that makes up the U.S. consumer price index, which fell 0.8 percent in April, the largest single-month decline since 2008.
The jump in prices of cereals and bakery products was the single steepest increase in a single month going back to 1919. This is something easily felt by grocery shoppers, especially low-income families with children at home all the time now and not eating meals at school. Breakfast cereal and bread for sandwiches at lunchtime are standard fare for kids, as well as adults.
With restaurants closed to dining and limited to pick-up or delivery service, the increase in grocery store purchases will continue and meat-industry analysts predict pricing spikes will continue through May. Overall, food purchased at grocery stores (the “food at home” index) has risen 4.1 percent over the last 12 months.
The bureau’s Consumer Price Index Summary, released Tuesday, said the price increases were “broad-based” across all six major grocery groupings in the “food at home” index, with each jumping “at least 1.5 percent” over March.
The Bureau of Labor Statistics noted, however, that methods of data collection were hindered slightly by the ongoing coronavirus health crisis, as “data collection by personal visit” had been suspended since March 16. That information was instead collected online or via the phone.
Tuesday’s Consumer Price Index Summary comes after meat-industry analysts and insiders predicted an increase in the prices of meat at the supermarket, with some predicting continued spikes into May. In April, the U.S. Department of Agriculture had also reported that egg prices, on average, had tripled since the beginning of March due to shortages and demand.
The price of food from restaurants rose just 0.1% in April after a 0.2% increase in March. Let’s hope food producers and grocers can stabilize the price increases in food items and transition smoothly once restaurants re-open and the demands of grocery stores shift again.