Food prices will be a lot higher this year, according to a new study of the agriculture and food industry.
According to the Food and Agricultural Policy Research Institute, a think tank at the University of Missouri, food prices will be at least 5% higher in 2022 compared to last year. That’s the biggest single year increase in 14 years.
The group’s director, Pat Westhoff, said the final number could be even higher.
“I won’t give you a specific number, but it’s safe to say that if we were creating a new baseline today, we’d almost certainly show a higher rate,” said Westhoff, who heads the institute.
While prices will be up across the board, Westhoff said some foods will see especially high prices.
“We have seen much larger increases year over year for meats, for fats and oils, and for fresh fruits than you did for most other products,” he said.
Labor costs, fuel prices, supply chain problems and the effects of Russia’s invasion of Ukraine are all partially to blame for the increases. Those same problems are at the heart of the overall inflation rate, according to economists.
Westhoff said while prices are higher, no one in food production will be getting richer.
“For example, at the farm level, yes, farmers are getting higher prices for the commodities that they sell, but they are also paying more for fertilizer, fuel and for other inputs,” Westhoff said. “And so the net income picture for farmers may not be terribly different this year from what it was last year.”
Westhoff said Russia’s invasion of Ukraine will also likely have long-lasting effects on food prices, lengthening the amount of time before food inflation rates get back to normal. The average increase in food prices over the past two decades has been 2.5%.
