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PURDUE ECONOMIST JAYSON LUSK: WHAT IS DRIVING THE INCREASE IN FOOD PRICES?
by Dr. Jayson Lusk, Purdue University

That's the title of a piece I wrote for Econofact. In it, I discuss the latest figures out from the Bureau of Labor Statistics, and discuss some of the drivers of volatility in food prices since the onset of the pandemic.

"More than a year into the pandemic, they are facing another unfamiliar trend when it comes to accessing food: notably higher prices. Increases in wages in the food sector, rising agricultural commodity prices, transportation bottlenecks, and strong consumer demand have led to the highest annual grocery price increases in a decade and the highest annual restaurant price increases since the early 1980s."

The main facts I outlined and discussed were:

Food prices have risen at a faster average rate since the onset of the pandemic than they did over the prior decade.

Food prices have been extraordinarily volatile throughout the pandemic.

Meat price changes have been a primary driver of overall food price increases.

Agricultural commodity prices have increased.

Heightened consumer demand has contributed to food
price increases.

Wage rates in the food industry have significantly risen over the course of the pandemic and these higher wages get reflected in higher food prices.

Food isn't necessarily less affordable - especially when considering a longer horizon.

You can read the whole thing here.


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