Over the past few months, each time I’ve entered a supermarket, I’ve found my jaw clenching as I steel myself for the outlandish price of food. How much will cereal be this week? What about eggs? It’s one banana—what could it cost? Ten dollars? Potentially! If you live in the US, you know what I’m talking about: the supermarket scaries.
Grocery prices have, to put it mildly, become buck wild. This began in 2020, when COVID decimated supply chains, driving up prices for just about everything. Since then we’ve been on a roller-coaster ride of grocery pricing. Costs have skyrocketed, sank, evened out, been falsely inflated (more on that later), and been subject to the effects of climate events and unpredictable disease.
Even today, three years later, headlines across the internet paint a confusing, sometimes contradictory picture of grocery pricing. So you’re probably wondering the same thing that I am: What is actually going on with grocery prices? Why are they up, down, and all around? And when will paying for groceries begin to feel normal again?
I turned to the experts for answers. The short of it: Rampant inflation, global supply issues, and unpredictable weather and disease all impact the price fluctuations. But it wasn’t all bad news—there may be some signs of prices evening out soon.
First, some context: how inflation has pushed prices over the last three years
To understand the way grocery prices have been fluctuating in recent months, it’s important to first understand the larger context of grocery pricing. Supermarket pricing has been a victim of inflation, or what’s essentially a loss of purchasing power. In the last 12 months alone, prices have increased 4%. And last year set us up particularly poorly. Chloe Riley, executive editor of Supermarket News, a grocery trade publication, says that 2022 saw price grocery costs increase at an almost unprecedented rate. According to the US Department of Agriculture, prices for food at home rose 11.4% last year—and that’s after spikes of 3.5% in both 2020 and 2021. “In 2022, US consumers saw the largest annual increase in food prices since the 1980s,” Riley says. For context, pre-2020, the last time grocery prices rose more than a full percent in a year was in 2014, when they rose by 3.7%.
But some price hikes, like with grains and eggs, were due to unpredictable events
But inflation is only part of the story. Riley says the recent spikes are due to a perfect storm of inflation, higher household incomes, engorged transportation costs, and unforeseeable hits to the agriculture industry.
The conflict in Ukraine drove up the price of grains to near record levels. Between 2021 and 2022 wheat prices rose an eye-popping 110%, according to the USDA, at first due to increased demand in the economic rebound after the worst of the pandemic, and then due to tightening export restrictions from the war in Ukraine. Drought across the US didn’t help, as The Washington Post reported in September of 2022. Crops across the country suffered, Laura Reiley of the Post wrote, and American corn was set to produce its lowest yield in a decade. This scarcity, political uncertainty, and international trade restrictions meant that supply was down and costs went up.