While the increases might sound small, they add up—quickly—for a family of four. Suddenly snacks we couldn’t live without before are no longer must-haves, as our food spending habits have shifted. My household has felt the pinch of higher food costs at the grocery store. I’m sure yours has, too. In fact, experts say food costs worldwide have been soaring. “Consumers are spending about 20% more on food now than they were before the pandemic,” states Melissa Walsh, CFA, CFP, AIF, founder and president of Clarity Financial Design. “With food and energy prices both going up, families are noticing that their paychecks are stretched by trips to the grocery store and the pump,” she notes. The increase can be especially impactful during the holiday season. We’ll take a look at what food items are most likely to have price increases, why prices are going up, and how to make food-buying decisions that can help your family budget absorb the additional food costs.
Food Prices in the United States
The Food and Agriculture Organization of the United Nations (FAO) Food Price Index tracks the changes in international costs each month for several food commodities. The index is currently at its highest since July 2011. Food costs have soared on a global level. Food price inflation has hit home nationally as well. “Food prices have increased in the United States. In October, they were up 5.3% compared to last year. Meat items have been especially impacted, with beef up 20.1% and pork up 14.1% over the last 12 months. Collectively, meat, poultry, eggs, and fish are up 11.9% over last year,” Walsh explains. Higher prices are translating to higher bills at checkout. “Our grocery bill has increased about $60 to $70 per week since early April of this year,” says Jana Strickland, a mother of six. Inflation also shows up when companies decrease the quantity of an item but keep the same costs. Smaller ice cream cartons, bags of chips that are less full, and even smaller portions when eating out highlight this trend.
Causes of Food Price Hikes
Consumers are being hit with inflation on every level. Prices are rising at the gas pumps, clothing is more expensive, and, with an eye to the approaching holidays, many toys cost more. Experts note that a variety of factors converged to create the perfect storm of higher prices. The COVID-19 pandemic has contributed to supply chain shortages all the way around. That delicious pie you want to purchase for Christmas dinner may not be available because the manufacturer just doesn’t have enough products to make pies. There are also issues with getting sufficient materials to package the items. The few pies that make it to the grocery shelves are in such high demand that the prices are driven up. “Labor shortages are also an issue. These issues range from workers to unload containers at the ports, to staffing food production facilities, to drivers for trucks to deliver the food. This is an issue that spans multiple industries, with rising wages and fewer workers contributing to higher prices and fewer products,” Walsh explains.
How This Impacts the Family Budget
Families may be excited to prepare a big meal for the holidays. Many families who opted not to hold a large celebration last year to avoid spreading the COVID-19 virus may feel safer now, with lower virus numbers. With the excitement of a potential family get-together this year, rising food prices are a consideration. “Around the holidays, many families are already spread thin from a financial standpoint. Home heating costs begin to impact our budgets, entertaining our friends and family can mean more expenses, and of course, the costs of purchasing holiday gifts add up. Rising food prices put additional pressure on our monthly budgets,” Walsh explains. The crunch has caused caregivers to make changes in how they feed their families. “Some purchases that seemed reasonable in the past are no longer reasonable for our family, such as orange juice, which is now just under $7 for a two-thirds gallon container,” Strickland notes. She uses practical tips to lighten her budgetary load. “I buy generic much more now. I buy and cook cheaper cuts of meat,” explains Strickland. “I buy the head of lettuce now instead of pre-bagged salads.” Price increases also hit healthier food options. “[When] it’s difficult to eat healthy the way we’d like to, some [people] resort to canned goods due to that being cheaper,” states Lainey Conroy, a dietary nutrition supervisor at Piedmont Fayette Hospital. Yaffi Lvova, RDN, owner of Baby Bloom Nutrition, offers a look at another healthy and cheap meal option. “Beans are versatile, inexpensive, and super nutritious. Buy dried beans to save the most money. To rehydrate, cover them in water in the slow cooker and cook on high for 3 hours,” she notes. Lvova says beans can be used in salads, spreads, and even baked goods. Families are finding they’re spending more out of pocket and have to make each food purchase stretch while using creativity to keep their families fed.
Getting the Biggest Bang for Your Buck
Knowing the reasons behind food price increases and feeling the impact is one thing. Having solutions in place to combat the rising costs is another. “I can say that couponing has come a long way in the past decade. Looking at the couponing apps and special offers at your favorite grocery store could really help lift some budget concerns,” notes Lvova. Buying in bulk can also be a big cost saver. Stores like BJ’s Wholesale Club and Costco can let you stock up on your favorite items. Parents caution that you want to look at the price per unit to ensure it really is cost-saving, and also make sure it’s an item your family will eat. “We’ve had to be a little less creative in the kitchen and keep things pretty basic as far as our menu,” Strickland notes. “Chicken thighs and chuck roasts make a regular rotation on our menu. We eat more eggs for breakfast and even dinner with frittatas or quiches.” She advises that a little planning now goes a long way in her household. “Plan ahead—right down to three square meals a day and snacks. I place a menu in view for my family to know what is coming. It helps cut down on the mindless snacking,” she notes.
Future Outlook
With no definitive end to the price crunch in sight, experts say to set your expectations for increased spending on food in grocery stores, and even in restaurants. “Expect eating out to be more expensive than eating at home next year, due to continued labor shortages. Staffing restaurants and fast-casual spots is increasingly difficult and results in higher wages,” states Walsh. As parents hunker down for continued grocery shop expenses, Strickland says she’s struck a key balance to getting everyone on board with the necessary purchasing cuts. “We get the whole family involved in our meal planning and grocery budgeting. There’s much less moaning and groaning when they helped pick out the menu,” she concludes.
