To get an idea of what a 40-year high inflation rate looks like south of the border, take a walk along Martin Luther King Jr. Avenue. in the historic Anacostia neighborhood of DC and ask locals about the price of groceries.
From bread to milk to a packet of chicken wings, most can reduce recent price fluctuations to the penny.
“Aniellava cost $ 125, and it’s now $ 170,” Benito Co, 34, said of the cost of a 40-pound box of chicken wings he used to buy for his small restaurant, 6Co. “I’m like, this is crazy. I’m just not selling [them] for now.”
The price of chicken has risen 19 percent last year, according to the latest U.S. consumer price index, which tracks the prices of tens of thousands of goods and services.
It’s just one of the impressive price hikes that pushed the global inflation rate in the U.S. to 9.1 percent last month, 1.4 percentage points above that of Canada a month earlier. In an average year, before the pandemic, inflation was closer to two percent.
Selena Lewis, on the right, takes a selfie with her boss, Benito Co, in the kitchen of the 6Co Eatery. Co said he had to get the chicken wings off the menu because they were going up so much in price that he couldn’t have sold them. (Selena Lewis)
For Americans, like Canadians, more has been noticed at the gas pump, where prices have risen 60 percent since last June. But the jump in the cost of commodities such as milk (16%), butter (26%), eggs (33%) and flour (19%) is also greatly affecting consumers and small businesses.
Fatma Nayir, 61, runs Mama’s Pizza Kitchen on the street from Co’s restaurant and is paying $ 26.99 for the 50-pound bag of flour that used to cost $ 18.
“Ground meat, flour, every item I use [has gone up]”she said.
A neon sign on the corner of Good Hope Rd. and Martin Luther King Jr. Avenue. marks the entrance to the historic district of Anacostia. The DC neighborhood was home to famed abolitionist Frederick Douglass and has been revitalized in recent years, but its residents still have some of the capital’s lowest incomes. (Kazi Stastna / CBC)
From eggs to pizza boxes
Price increases have been exacerbated by the shortage of supply that began in the COVID-19 pandemic and continues to affect businesses. When the cardboard pizza boxes essential to his business began to become expensive and hard to find, Nayir debated the use of trays. The plastic forks that were once in the front of customers are now distributed in moderation from behind the counter.
Two months ago, in the face of an increase in DC’s minimum wage that began on July 1, it finally increased its prices by 10 percent. It’s not a move you’ve made lightly in an area where 60 percent of residents earn less than $ 50,000 a year and the average family income is $ 37,963.
“It’s really general, from top to bottom,” Laila Winborne, 35, said of the impact of inflation as she waited to pick up a pizza.
The married mother of three works at Nationals Park Stadium. The reduction in family outings and other extras that many people believe they have to do has meant fewer stadium visitors and fewer shifts for Winborne.
At home, Winborne struggles to maintain his own vegan diet, which is already expensive, and stretch his family’s grocery budget. A box of 60 eggs cost him about $ 10 at the local Safeway, he said, but is now closer to $ 19.
“At least if I go to Walmart, it’s $ 9, but since it’s Walmart, they’re always out of stock,” he said. “People who used to not go shopping there, now, buy these lower ones [priced stores]. It’s like, come on, this is our store! “
People shop at a grocery store in Monterey Park, California. Milk costs 16% more on average than a year ago, according to the U.S. Consumer Statistics Office’s consumer price index, which tracks thousands of items month-to-month. . (Frederic J. Brown / AFP / Getty Images)
Fuel costs, wages that drive up prices
So what is driving the increase? Economists say it is a combination of factors, which include:
- Fuel and energy costs, exacerbated by the Russian invasion of Ukraine. These include everything from fertilizers on the farm to refrigeration in the store and intermediate transportation.
- The post-pandemic labor shortage that has raised wages, which accounts for about half of the price we pay at the grocery store, according to Christopher Barrett, an agricultural economist at Cornell University in Ithaca, New York .
- Pandemic-related costs, such as reorienting supply chains and dealing with ongoing outbreaks.
- Expanding the money supply through initiatives such as COVID-19 stimulus programs and Federal Reserve actions.
“Farmers are not getting any extraordinary benefit from the high agricultural prices this year,” said Roger Cryan, chief economist at the American Farm Bureau Federation, which is lobbying on behalf of the agricultural industry.
“After they’ve covered their transportation, their shipping costs, and their marketing costs, they get about eight cents from the retail dollar to cover their costs on the farm.”
Cattle at CS Ranch in Cimarron, NM, during a workshop on adaptive grazing and other forms of regenerative farming organized by Soil Health Academy in June. Some experts say growing demand for food requires more sustainable practices to address the impacts of climate change on agriculture. (Mario Tama / Getty Images)
The less processed a food is, the greater its proportion, he said. A bottle of milk, for example, can return about half the selling price to the farmer.
Cryan said the pandemic demanded limited supply as people stopped eating out and bought more groceries, and this increased the overall cost of food production.
“If demand grows quickly, it can be very difficult to keep up.”
Food prices are rising rapidly, falling slowly
Profit-driven margins are also likely a component of price increases, Barrett said, given the scope of market concentration in the food and grocery sectors.
“There are underlying cost pressures on the economy that contribute to some of the inflation, but companies with market power see this as an opportunity to further increase their profits behind consumers.”
Shoppers pass by the bread on display in a supermarket in the Alhambra, California. Bread and flour are among the commodities that have experienced a sharp rise in prices. (Frederic J. Brown / AFP / Getty Images)
However, there is relief in sight, said both Barrett and Cryan. Gasoline prices have begun to fall, averaging about $ 4.55 a gallon ($ 1.56 a liter) on Saturday compared to more than $ 5 last month, and President Joe Biden said that its talks with oil-producing nations this week should release more supply.
Unfortunately for consumers, food prices are falling more slowly than they are, Barrett said.
“Food price traders often comment that prices go up like a rocket and fall like a feather.”
“The cost of gas is killing us”
Meanwhile, normal Americans are saving where they can, cutting down on non-essential goods such as new clothes and snacks, buying less meat, and using cost-saving apps.
Heavy machine operators Charles Starling, 37, and Howard Fells, 31, are trying to keep driving to a minimum. Family vacations and weekend getaways are off the table at the moment, they said as they paused to install a storm drain.
Heavy equipment operator Charles Starling, 37, travels about 40 miles from his home in Laurel, Maryland, to his job in DC and feels pressured by gas prices, which until recently hovered around $ 5 a gallon compared to about $ 3 a year. does. (Kazi Stastna / CBC)
“The cost of gas is killing us,” said Starling, who lives in Laurel, Maryland but works in DC. “I have to travel at least 26 to 27 miles. [about 42 to 43 km] one day”.
Others are getting creative in adjusting the belt.
Chanel Williams, 35, is a single mother of a two-year-old and a 15-year-old. She is doing more gardening and trying to reduce food waste by canning.
“The things in my garden, like beans, that would go wrong, I can marinate,” he said. “With cabbage, I’ve been making kimchi.”
Williams owns a home, works as a janitor on the city subway, and owns her own decontamination and hazardous materials business. But he still has to go to a local food bank to look for staples such as diapers and to cover all of his family’s food needs.
Chanel Williams, 35, has come up with creative ways to save money and make food for her and her two children last longer. Garden, can, freeze and divide the meat into smaller portions. He also receives help from a local food bank. (Kazi Stastna / CBC)
“I’ve been relying heavily on cereals and legumes, dry food,” he said. “I’ve been breaking down portions of food and freezing meticulously.”
Most of the discussion about how the government can help Americans control inflation has focused on reducing tariffs on Chinese imports and on holiday with gas taxes. But Barrett said Williams’ solutions are more in line with what governments should do.
Climate change has done that cut agricultural productivity around the world, and if food supply is to keep pace with growing demand, we need to do better to recover food waste, increase the production of vegetable protein and laboratory-grown meat, and expand the ‘environmentally controlled agriculture such as hydroponics and vertical agriculture, he said.
“They need to double investment in R&D to produce more food with less water, less chemicals, closer to where people live and cheaper.”
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