The U.S. Department of Agriculture revealed its forecast for food prices into 2023, and the chances of prices falling appear slim.
From grocery stores to restaurants, prices have consistently risen since 2020, when the COVID-19 pandemic sparked a rise in food costs that shows no signs of stopping. The war in Ukraine and a drought in Brazil add to the misery felt by consumers and restauranteurs.
The USDA report showed an expected rise in food prices of 5%, with poultry prices rising by as much as 7%. The overall price rise of 5% is forecast to be the most significant increase since 2008.
Food prices have risen by over 8% since 2021. The long-term outlook has caused concern among commodity traders who are seeing an impact on their profits. U.S. fast-food restaurant owners are calling for government assistance to cap the spiraling cost of ingredients.
Increasing prices for poultry and dairy are causing concern among owners of fast-food locations using chicken. The cost of chicken has been among the fastest rising, with prices for chicken sandwiches in Chicago climbing above $10. Restaurant owners face questions from customers about the rising cost of their favorite meals, with more price hikes on the horizon.
Covid-19 sparked the first food shortages after meatpacking plants closed. Needs have continued since, with global events causing long-term problems in the food supply chain. Brazil’s chicken feed has suffered due to drought, limiting production in the latter half of 2021. The cost of chicken feed has only risen further since the war in Ukraine.
The cost of chicken and poultry is causing concern, but the problems in producing oils will cause more cost disruption. The latest difficulties include the rising cost of canola oil, with vegetable oils also expected to rise.
Oils have become indispensable to the global food supply chain, and problems will continue to drive the increase in all food prices. Using oils to fry noodles in Asia and fries in North America makes this an essential part of the global food industry.
An unexpected byproduct of the war in Ukraine is a shortage of fertilizer in South America. Brazilian farmers have asked to limit fertilizer use by 30-50% to keep their crops growing.
Governments are stepping in to limit exports, which could cause issues for African nations relying on imports for survival.
There are several problems facing the global food supply that will continue to cause problems in food supplies for several months.