Grocery Prices Rise in US as Pandemic Disrupts Supply Chains
Aug 08, 2020 02:41 AM EDT | By MaryAnneR.
Grocery prices in the United States have increased as the coronavirus pandemic massively affects the global supply chains.
Over 36 million Americans are currently unemployed, which makes food security concerned partnered with increasing good in the market.
Food insecurity affects one in six Americans, even before the COVID-19 pandemic started. A National Geographic report said this would likely increase.
The American Farm Bureau said that only about eight percent of farms in the United States supply food locally. The rest are supplying a complex network that ensures restaurants and grocery stores nationwide.
"What we have is a low-cost and efficient system that allows for huge variety and attention to individual tastes," Daniel Sumner, an economist at the University of California, Davis, was quoted in a report.
The U.S. has two direct supply chains. It supplies grocery stores, and other supplies in the food service industry.
Grocery prices have increased through the roof during the pandemic, and this is not because they are buying more groceries as they spend more time at home, according to a CNN report.
Here are some grocery staples that increased its prices:
Demand for beef in grocery stores has increased, with a 92 percent recorded increase in late March. However, sit-down restaurants and other eateries are only beginning to reopen after a long shutdown to contain the spread of COVID-19.
According to the National Cattleman's Beef Association, cattle ranchers face a $13 billion loss through 2021 as a result of the pandemic.
Reports said meat and poultry prices increased by up to 11 percent in April and May. Many meatpacking plants had to close their doors temporarily because workers were being infected with the virus.
This happened to several suppliers of pork products such as Smithfield Foods' facility in Sioux Falls, South Dakota. They had to close down operations as there were over 230 positive cases among their workers.
The overall decline in dairy products from schools and the restaurant industry has made dairy farmers produce more raw milk that they can sell.
Ben Brown, an expert in agricultural risk management at The Risk Institute at Ohio State University, said that schools were number one consumer of milk
"It comes in the form of those little cartons. When schools shut down, we saw a strong decline in the consumption of fluid milk," Brown was quoted in a report.
Some grocery stores have also limited the amount of milk allowed of purchase by every single customer. It aims to prevent hoarding.
Restaurant demand for dairy products like butter and cheese has also decreased. But reports said that some states are reopening restaurants, which causes an eventual increase in demand.
Demand for eggs rose in mid-March when states were beginning to issue stay-at-home orders. It resulted in egg shortages as farmers with contracts to sell food service establishments tried to find new buyers. About 30 percent of eggs produced in the country are eventually sold off in liquid form.
Demand for potatoes has also sharply declined when in-service dining was shut down, then eventually reduced. Some fast food vendors have canceled their orders from farmers before the pandemic.
One farm in Idaho began giving away potatoes for free to anyone who would take them.
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