With gas prices below $2 per gallon — about half of what they were less than two years ago — many are feeling a little relief at the pump. At the grocery store, however, the price of basic food items such as eggs, meat, and bread have all increased by at least 40% in recent years, despite tame national inflation.
Nationwide, food prices, as measured by the Consumer Price Index (CPI), increased 31.5% from 2005 through 2015, faster than general inflation over that period. The price of eggs more than doubled over the period reviewed, by far the largest increase of any grocery item. Using data from the Bureau of Labor Statistics (BLS), 24/7 Wall St. examined consumer price changes from 2005 through 2015 for more than 300 goods and services. These are the grocery items driving up your bill the most.
Sickness and disease of livestock are the primary reasons for many food price increases. An avian flu outbreak in August 2015 forced farmers to kill millions of egg-laying chickens, contributing to the 110% increase in the price of eggs in the 11 years through 2015. Similarly, a porcine epidemic diarrhea virus swept through the hog industry in 2013 and 2014, killing millions of pigs. Perhaps as a consequence, prices of bacon and sausage increased by 34.5%, and hot dog prices rose by 43.5%.
Particularly dry or extremely rainy seasons in food growing regions can also have a significant impact on consumer food prices. For example, grain such as wheat is highly susceptible to flooding that can occur in Plains states where most of the U.S. crop is grown.
Drought, a perennial problem in California, can also lead to sudden price increases of corn, the primary food for livestock. When feed prices spike, many farmers bring their animals to market earlier than they normally would to avoid the higher costs of raising them. This may induce a temporary decline in related consumer prices such as beef, pork, or milk, but future supply of these goods may be less able to meet demand, causing price increases.
One reason for the spike in feed prices may be due to competition from other industries for corn. For example, corn can be used to make ethanol, and historically high fuel prices during the period reviewed may have resulted in more corn being allocated to fuel than to feed. For this reason, corn reserves hit their lowest level in 15 years in 2011 due to rising ethanol demand. Consumer food prices rose as a result.
Higher global demand is another reason food prices may increase. A number of fish species, for example, including tilapia, salmon, and shellfish, are particularly popular in China and often subject to overfishing as a result of the county’s rapid population growth and food needs. Similarly, trade restrictions in Vietnam and India, two of the world’s largest rice producers, drove up the price of rice in 2008.
Rising food prices not only increase Americans’ grocery bills, but also can impact restaurants, which could be forced to amend portion sizes or entire menus to stave off shrinking margins. Restaurants may even decide to fire workers, forcing some service industry workers to contend not only with higher food prices, but unemployment as well.
To determine the grocery items driving up your bill the most, 24/7 Wall St., reviewed consumer price indices from 2005 through 2015 for over 300 goods from the Bureau of Labor Statistics (BLS). Definitions for each food category also came from the BLS.
These are the groceries driving up your bill the most.