CHICAGO (NewsNation Now) — From milk and coffee to cookies, increases in the prices of food products are set to increase in 2022.
Food retailers and distributors say they will start increasing food prices as early as January; some say it could be up as much as 20%.
Earlier this month, overall inflation rates rose to 6.8% over the previous year, marking the fastest annual increase in the inflation rate since June 1982, according to the latest consumer price index data from the Bureau of Labor Statistics.
Micahel Magdovitz, an agricultural markets analyst for Rabobank, a multinational banking and financial services company, told NewsNation strong demand hitting strained supply is impacting inflation.
“We see from upstream to downstream farmers are facing higher prices for their inputs for their seed. And we’re seeing logistics jammed by, you know, labor shortages, constraints, inputs, higher energy prices,” Magdovitz explained. “So weather is also being pretty problematic this year, in terms of farm goods, like wheat, corn, and soybeans, coffee as well. So you take this all together with the strong demand that we’re seeing. And it’s just made an inflationary price environment for food goods.”
More consumers cooked at home over the past year, so supply and demand for everyday items like cooking oil and bread saw the most significant price increases.
“We’re seeing vegetable oil, cooking oil prices rise. We saw for a period of time, wheat prices, bread prices are increasing also quite dramatically. But it’s really all throughout the food supply chain; we are seeing prices rise. And so while some products have been impacted more than others, you’re really going to see this hit your wallet dramatically this year,” Magdovitz explained.
Magdovitz continued, “Many of the big food players have already bought their ingredients for 2022 at much higher prices than they have historically. And they lock that in, and that’s why they’ve been talking about passing along that cost to us, the end consumer, so it’s hard to see prices coming down over the course of the next year that we may say, see inflation with rising prices start to cool.”
Watch the full interview in the media player above.