Last week, I went to my local Bojangles for lunch. I was shocked to see a bright yellow sign posted by the drive-thru menu that said, “Due to Short Supply Temporarily Out of Chicken Supremes.”
Unfortunately, this isn’t just an issue for Bojangles or other fast-food restaurants. All across the country, grocery stores and restaurant owners are having difficulty getting certain products or keeping them on the shelves.
That’s just the start of the problem. While I may have been disappointed to have to forego my Chicken Supremes, I am more disappointed when I look at my receipts.
If a restaurant does have chicken wings, they cost more than usual. Food prices are rising in grocery stores and restaurants – and experts don’t think costs are going to go down anytime soon.
Food cost inflation is becoming a serious concern for consumers. A 2021 Bloomberg Wealth report states, “In Indonesia, tofu is 30% more expensive than it was in December. In Brazil, the price of local mainstay turtle beans is up 54% compared to last January. In Russia, consumers are paying 61% more for sugar than a year ago.”
Specifically, “The price of staples like grains, sunflower seeds, soybeans and sugar have soared, pushing global food prices to a fresh six-year high in January. They’re not likely to fall any time soon.”
This is one of the reasons the recent Colonial Pipeline cyberattack could hardly have come at a worse time. Supply chain breakdowns like this will only exacerbate soaring food costs. Combine that with factors like the sudden spike in consumer demand and weather disasters, and you get a massive chain reaction affecting the cost of food production, transportation, and packaging.
In the United States, inflation is measured by the Consumer Price Index (CPI) and tends to be around 2% annually. This type of inflation is a good thing because it is a sign of a healthy, growing economy.
However, on Wednesday, May 12, the Labor Department reported consumer prices are up 4.2%. This is the sharpest increase since 2008.
Food costs have now surpassed the standard 2% inflation. In fact, data from NielsenIQ shows that in a 13-week period that ended April 24, 2021, seafood prices are up 18.7% on average over the same time last year. Baked goods are up about 7.5% for the same period.
Of the 52 categories tracked by NielsenIQ, 50 categories are more expensive than this time last year. Butter and milk are the only two categories not seeing increases yet.
While there are numerous factors at play, rising commodity prices are partially contributing to the increase in food costs. The Bloomberg Commodity Spot Index (BCOM), which tracks 23 commodity futures in 6 sectors, is at its highest level in almost a decade.
Even the White House has issued statements stating that they believe inflation will continue to rise modestly over the coming months.
[Related Read: Preparing for Hyperinflation: What You Need to Know]
In other words, this isn’t just a fluke. It’s a real problem, yet there’s no need to panic. Inflated food costs are something you can prepare for right now. It’s as simple as purchasing items today you can store for the long term.
Supply Chain Disruptions
COVID-19 caused massive supply chain disruptions that we are still dealing with today. Essentially, it causes a ripple effect. For example, if the production in a chicken plant comes to a halt and the supply dwindles, the cost of chicken will rise to meet the demand.
Phil Lempert, the founder of SupermarketGuru.com, explains, “Food production in the U.S. also relies on a highly mobile army of laborers, whose low pay and crowded working conditions make them uniquely vulnerable to Covid-19 — a combination of circumstances that have crimped production and raised costs for food producers. […] The combination of production bottlenecks and demand spikes have culminated in higher prices, especially for meat.”
[Related Read: How to Prepare for More Supply Chain Disruptions]
In addition, lack of fuel can cause supply chain disruptions. We saw this play out with the recent cyberattack against Colonial Pipeline on May 7, 2021. The ransomware attack shut down the company’s shipments along their 5,500-mile system that takes fuel from refineries on the Gulf Coast to the New York metro area. The company supplies roughly 45% of fuel consumed by the East Coast. By mid week, even after the pipelines came back online, 15,000 gas stations in the US remained completely out of fuel.
And it's not just fuel that's vulnerable. Massive cyberattacks are becoming increasingly common. Just in the last year we've seen the SolarWinds hack of the government and military, a massive medical records hack, and then a water systems hack in Florida that itself could have easily caused a large supply chain disruption.
Experts agree that further shortages and disruptions from cyberattacks are a matter of if, not when.
Industry leaders are also noticing an increase in demand as more people venture out to restaurants that have increased capacity.
The White House suggests, “As more people get vaccinated throughout the year, however, demand for these and other high-touch services could surge and temporarily outstrip supply. […] For example, Americans may have a high demand to eat out in full-service restaurants again later this year, but may find that there are fewer dining options than were open pre-pandemic. That could prompt restaurants that are still open to raise their prices.”
Rising Transport Costs
Another issue resulting in rising food costs comes from the transportation industry. The rising cost of oil has made it necessary for carriers to increase their prices.
In addition, there is a national truck driver shortage. Companies simply can’t find enough truckers to drive. As a result, carriers or independent drivers bump costs up, which also increases product prices. It is a chain reaction.
Bloomberg Intelligence Analyst Jennifer Bartashus explains, “Everyone is looking to offset higher transportation costs, higher labor costs and higher input costs. And that flows through the whole chain all the way to the consumer.”
Essentially, the consumer ends up paying for the higher cost of gas and transportation when buying groceries, such as bread.
Increased Weather Disruptions
The weather also plays a part in the rise in food prices. The freak winter storm that struck Texas is partly to blame for the lack of Chicken Supremes at Bojangles. This is because the winter storm left Texans (and their chickens) without power or water for days.
Texas is one of the nation’s largest poultry producers, so the winter storm had a large effect on the industry as a whole. For example, Sanderson Farms in Texas lost 1.6 million chickens because of the storm and reported disruptions in the supply chain for at least 10 weeks.
Moreover, the winter storm devastated the Texas produce industry, which usually accounts for a large amount of produce shipped across the country. Millions of dollars’ worth of citrus, leafy greens, and vegetable crops were lost. As a result, produce is having to be brought in from other areas, such as Florida, thus raising the costs.
Stock Up on Food to Stand Strong against This Insecurity
It’s easy to place blame on the government for inflation and food insecurity. But, we never know when a freak winter storm will destroy crops or when a hurricane will make it difficult for trucks to transport needed goods.
Rather than rely on the government to lower food costs, make strides towards self-sufficiency by stocking up on food storage. Invest in quality long-term food storage to ensure you have food when you need it without having to pay significantly more when a crisis happens.
My Patriot Supply’s Emergency Food Storage with a 25-year shelf life would hedge against disaster and be a great investment. If the country continues to face food shortages, you can rest easy knowing you are prepared. Likewise, if food costs rise to astronomical rates, you won’t have to spend your savings to eat.
If you’re a big coffee drinker, consider stocking up on Franklin's Finest Survival Coffee. It’s 100% Colombian coffee, has a 30-year shelf life, and buying it today will save you money in the long run.
Prepare today for rising food costs tomorrow, friends. Stay alert, please.
Preparedness Advisor, My Patriot Supply
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- Tags: Covid-19, Financial, Food preparedness, Food shortage, Food storage, Inflation, Natural disasters