For the longest time, food prices remained stable in the United States, and consumers were not particularly concerned about price fluctuations each month. Even though there were readjustments to the cost of staples every year, those increases weren’t exactly alarming, and back then, one could say they were truly temporary. Our supermarkets were packed with food and something that always made grocers proud was their ability to ensure an enormous variety for their customers. But now we can say that things are a whole lot different, and not in a good way. As the world tries to rebound from the global recession induced by the health crisis, a massive wave of inflation is dramatically hitting agricultural commodities, and food producers are having to pass those cost increases to consumers.
However, many industry experts have been warning that the recent price hikes won’t be the only ones. In fact, they are marking the beginning of a prolonged era of higher prices and low supply. This means that although we’re already facing some painful food inflation, prices won’t get any lower than they are at this moment for a long, long time. And when we look forward, several events that are unfolding right now will likely combine, and contribute to the acceleration of food price inflation in the coming months. In view of such a scary scenario, the best way to fight inflation is to get prepared in advance. That’s why today we brought 5 specific reasons why you should start stockpiling food as soon as you can.
In a telling sign of what is coming for us in the months ahead, recent reports have been describing that supermarkets are feverishly stockpiling food in anticipation of the coming inflationary spike. According to the Wall Street Journal, several supermarket chains have started to stock up on everything from sugar to frozen meat before they get more expensive, bracing for what some executives anticipate will be “some of the highest price increases in recent memory”. The move is a reversal from what happened last year when millions of panic buyers hoarded groceries because of concerns about food availability, triggering supply chain disruptions and acute shortages all across the country. Now, retailers themselves are buying and storing supplies to keep their shelves full amid stronger demand, in that way, they can have more control over rising costs and protect their profit margins.
The latest price increases at the stores and the need to stockpile come as several key factors are pushing up costs all the way from farm to store. But one thing is certain: when inflation starts to run out of control, these companies will conveniently keep the price of their products significantly higher even though they have been stocking up on inventory before prices of inventory rise. When food retailers start to brace for the worst of inflation, that of course, is not a good sign for consumers. So it seems like a good option to start stockpiling too before essential products become unaffordable.
With gas prices hitting record highs every month, it has become way more expensive to transport food around the country. Supply transportation costs have already been going up due to a national shortage of drivers, but now that gas prices rose 56 percent compared to a year ago, those increases will also impact food prices. Moreover, the ruthless “megadrought” in the western states just continues to get worse. For years, people have been diverting water from rivers that flow into the lake to water crops and supply homes. And since there isn’t enough water for everyone, millions of farmers are having to dramatically reduce the number of crops that they are currently growing.
On top of all that, a devastating plague of grasshoppers is now causing massive headaches for our farmers in western states. Many local farmers have already started to report extremely painful crop losses. So far, Oregon and Montana have been the hardest hit by the insect plague, but fifteen other states are also facing grasshopper damage. All combined, the 17 states suffering from this pest have recorded a loss in agricultural produce of $8.7 billion.
All things considered, our long-term outlook is rather gloomy and quite scary. Each of these factors will severely impact our food supply chains and all of them are going to combine to drive prices to levels never seen before. If someone still believes inflation is going to be transitory, we’re sorry to say that what we have seen so far was just the tip of the iceberg. So if you don’t want to get caught off-guard by shortages and explosive prices, you should stock up on the supplies you need before they’re long gone.