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Sep. 19—TUPELO — Perusing the meat department at Palmer's Shoppers Value Foods, Kendall Johnson was looking for deals. He found some, and at a time when food prices are soaring, that's something that's getting more difficult.
"Some things have gone up, but they have some sales right now that are pretty decent," she said.
Johnson, of Tupelo, said she does more shopping around to find the best prices. And she's also had to adjust her buying habits to fit her budget.
"There are some things I used to buy that I don't anymore, especially at Walmart," she said. "I don't even buy meat from Walmart anymore because it's gone up so much. But I try to go to the closest place I can."
CONSUMER PRICE INDEX
Americans continue to face higher costs, reflected in sharp annual increases in the consumer price index going back to April. The July reading matched the year-over-year inflation rate of 5.4% in June, the largest annual jump since 2008.
Consumer price index, annual percent change, not seasonally adjusted:
Inflation has reached an 11-year high, and consumers are feeling the brunt, from grocery stores to gas stations. But it's at the former where they're experiencing some of the biggest sticker shocks.
A combination of factors has led to the higher prices, including increased demand, supply chain issues, labor shortages and soaring transportation costs that are driving prices higher across the board.
Considerable increases in meat prices account for about half of the overall increase in grocery prices, according to a report from the White House's National Economic Council. Since December 2020, prices for beef have risen by 14%, pork by 12.1%, and poultry by 6.6%.
Fruits and vegetables are also up by 4.4%, cereals and bakery goods are up 4.3%, and dairy and related products are up 6.3% as of July compared to a year earlier.
"Dairy and frozen has gone up probably 7 to 8% now," said Clay Knight, who owns Big Star in Saltillo. "Meat is the highest across the board. Chicken wings have never been this high. Boneless chicken breasts we used to could do $1.99 a pound, but now they're $3.99, but really need to be more than that."
Similar to other grocers, Knight is holding the line as best he can with prices, but he's at the mercy of distributors and suppliers who have raised their costs.
"We're having to change prices every day," he said. "There are a few going down, but most are going up."
The increase to grocery prices should come as no surprise to anyone keeping an eye on the market. Food giants like Kraft, General Mills, Unilever have all raised prices and say they expect to continue to adjust through 2022 at least.
With the volatility in prices, stores are constantly having to adjust and change their prices as well.
The American Bakers Association projects consumers could see prices for baked goods rise by 5-10% in the coming months. According to the organization, 49 of 50 bakery inputs have seen price increases. For example, poor yields and increased demand for edible oils has led to soaring prices. Soybean oil, a critical baking ingredient, has risen 238%. And domestically sourced gluten is currently unavailable, forcing bakers to find the ingredient elsewhere.
And there is no relief in sight: The U.S. Labor Department said inflation at the wholesale level climbed 8.3% last month from August 2020, the biggest annual gain since it started calculating the number in 2010. Also, the Bureau of Labor Statistics reported an additional overall food price increase of 0.4% in August compared to July, after larger increases in recent months.
The Biden Administration is pointing blame at the consolidation in the meat industry, which has led to fewer processors and, in its view, less competition.
Farm Progress reported that industry officials disagree.
Mark Dopp, chief operating officer for the North American Meat Institute, told the magazine, "As with almost every industry, meat and poultry packers and processors of all sizes have been, and continue to be, affected by the global pandemic and the inflationary trends that challenge the U.S. economy. American consumers of most goods and services are seeing higher costs, largely due to a persistent and widespread labor shortage. The meat and poultry industry is no different."
'Not much relief'
Brooks Davis opened his first store in 2011 in Iuka. Since then, a Brooks Grocery has opened in Chapel Hill, Tennessee, and in July, a third store opened in Tupelo.
Davis said he's never seen the volatility in prices like he's seen since the pandemic started.
"What I gather is with this second round of COVID, just like the first round, it's not that there's a shortage of beef, pork or chicken — it's a shortage of people to pack them," he said. "Those facilities are very labor-intensive process, and they just don't have the people. And there's the effect of supply and demand."
Davis said after Labor Day, meat prices typically decline; that's not the case this year. Prices have stabilized somewhat, but they have not dropped.
Transportation is another component in the price of goods on grocery store shelves. Freight costs have doubled in many instances. The International Food Distributors Association estimates more than 17,000 warehouse and 15,000 drivers positions are open. Those unfilled jobs are a challenge for not only the distributors but the stores and, ultimately, the consumers.
"All that feeds into the final price, and it's unfortunate," Brooks said. "We're definitely getting more prices increases from our wholesalers and decreases. Usually on a weekly basis, it's a 50-50 split. Now its 90-10. You just don't see much relief."
With problems at the warehouses, and up and down the supply chain, grocers are facing more "outs," where items are either in short supply or no longer available.
Shoppers have noticed.
Jessica Tidwell, who was shopping at Palmer's on Wednesday, was looking for bargains for her family. She was careful during the pandemic to stick to a budget and continues to do so. It's just a little more difficult these days.
Tidwell has even altered recipes to adjust for the higher costs, looking for more budget-friendly substitutes.
"It was hard to make it before, but it's definitely much harder now," she said.
Tidwell noted that she's spotted a lot of empty spaces on shelves and shortages of items she's searching for.
"If you do find something, there may be only one or two of them," she said. "I'm seeing a lot of that in the baby department,. It's really frustrating, especially when you have a little one who's trying new things and you're looking for friendly foods for her and it's hard to find options."