Inflation: Food is costing more and more - but so is everything else

 

We've warned several times over the past few years in these pages about the rising cost of food (particularly when one takes the actual rate of inflation into account, rather than the carefully massaged and politically correct figures provided by the Bureau of Labor Statistics).  I said in September 2022 that my household's actual annual inflation rate (the prices we're paying for the things we buy, as opposed to the "general" basket of goods analyzed by the BLS) had exceeded 30%.  A little more than a year later, Karl Denninger confirmed that figure from his own experience.  As far as our wallets can tell us, nothing has yet changed for the better.

Even using the BLS's figures, distorted as they are by political factors, things aren't looking great.  The Wall Street Journal reports:

Eating continues to cost more, even as overall inflation has eased from the blistering pace consumers endured throughout much of 2022 and 2023. Prices at restaurants and other eateries were up 5.1% last month compared with January 2023, while grocery costs increased 1.2% during the same period, Labor Department data show.

Relief isn’t likely to arrive soon. Restaurant and food company executives said they are still grappling with rising labor costs and some ingredients, such as cocoa, that are only getting more expensive. Consumers, they said, will find ways to cope.

“If you look historically after periods of inflation, there’s really no period you could point to where [food] prices go back down,” said Steve Cahillane, chief executive of snack giant Kellanova, in an interview. “They tend to be sticky.”

. . .

Cahillane said that as consumers become accustomed to seeing higher prices on supermarket shelves, they will adjust.

“Just like a gallon of gas, it becomes the new price and people get begrudgingly used to it,” he said.

There's more at the link.

What Mr. Cahillane fails to take into account is that cash-strapped consumers may not be able to adjust.  Family disposable income has to be allocated between many needs:  housing, clothing, transport, insurance, and other needs besides food alone.  When everything is getting more expensive, hard choices may have to be made.  For example, I've just had to spend almost $2,000 as a co-pay on a medical procedure (being the beginning of a new year, we have to meet our new annual medical insurance deductible, so such costs will be higher until we've done that).  That wasn't planned, and wasn't in our budget.  Without our (now somewhat smaller) emergency fund for a rainy day, we wouldn't have been able to afford it, and we'd have had to tighten our belts in many ways (including our food expenditure).

I'm aware that in poorer areas of this country, particularly some Native American reservations and farming areas, families are already reduced to eating a great deal of soup and home-made bread rather than buying anything more nutritious.  (As a retired pastor, I can tap into the reports being circulated among pastors in those areas.)  Certainly, my wife and I find ourselves increasing our contribution to food banks in our area, because they're overrun with needy families who can't make ends meet without such assistance.

I'll be grateful if you, dear readers, would share with us how you're coping with rising prices, particularly of food, but also including other necessities.  Are you battling to cope, as we are?  Do you see any light at the end of the tunnel that isn't an oncoming train?  Please share with us in Comments, so we can all learn from each other.

Thanks.

Peter