International turmoil has lead to food price highs. Global food prices are 25% higher than they were prior to Covid in early 2020. There have been significant transportation disruptions mainly due to the impacts of the war the in Ukraine and the pandemic. Energy shortages have made it much more difficult to ship food around the world. Supply chain issues as well as increasing fertilizer prices continue to hinder the food market. Ukraine, one of the world's largest suppliers of grain and sunflower oil are unable to export their product. With prices expected to become more volatile, the global food market continues to look more grim.
US food suppliers and restaurants have been significantly affected by these rising costs. US firms are having to spend substantially more to ship food domestically. Following the pandemic, there is still port congestion and a shortage of containers for shipments. For example, the cost of shipping a container from the port of Baltimore to Pennsylvania has tripled in cost to $4,500. A decreased supply of truck drivers are contributing to these adding expenses. However, the expense of importing ingredients from abroad is much more costly. Restaurants across the country are unable to cover the costs of sourcing ingredients from abroad so they are forced to either alter menu items or switch to domestic ingredients. It is evident that global supply chain issue continue to have grave affects on the US food market. The Agriculture Department predicts US food prices to rise another 3% to 4% in 2023.
https://www.wsj.com/articles/globalized-supply-chain-brings-more-turbulent-food-prices-11669557602?mod=economy_lead_story
Overall, really interesting post! I think it would be interesting to see how this did affect thanksgiving meals and will potentially affect Christmas meals? How much less Turkey was consumed? Was there an increase in the number of canned goods that were consumed? I think overall, it will be interesting to see how this increase in the cost of food will affect our spending habits when it comes to what we consume.
ReplyDeleteSupply chain issues have been lingering. With supply issues in food, could this impact access to healthy food options for the country? I'm interested to see how supply chain issues with food impact places where large quantities of food are needed.
ReplyDeleteI'm curious to see if an increase in domestic oil production could help lower the costs of transporting food domestically.
ReplyDeleteFood within grocery stores has been noticeably rising. What used to cost $50 a week in groceries, now cost closer to $90. Restaurants and other food service businesses are not the only ones suffering from shipping delays and high costs. These costs are getting passed onto individuals just trying to eat.
ReplyDeleteWorking at a logistics company over the summer made me realize how important transportation is within the macroeconomic outlook. While working, I noticed the decreased supply for truck drivers and how it delayed most of our shipments. Not only did this affect my job, but it affected the supply of the company that were supposed to receive these goods. Great post!
ReplyDelete