Food prices will rise again in 2023, putting more pressure on families
The U.S. Department of Agriculture predicts food prices will continue their climb in 2023. All food prices are projected to increase about 8% over 2022 rates, with at-home food costs slightly higher than restaurant rates.
Economists see eggs continuing to lead the pack with a 37.8% increase this year, while beef and pork prices decrease about 1%.
The silver lining? It’s not expected to be as sharp of a jump as consumers saw in 2022.
Still, the ongoing high prices put pressure on grocery stores where margins are thin. Business is getting slower at Wohlner’s Neighborhood Grocery & Deli in Omaha, where owner Robert Kimball has paid up to 15% more for his products in the past year.
Just getting product to the independent grocery is a big expense – fuel was up $8,000 last year, and Kimball expects it to increase more this year.
He said he’s doing his best to keep the lights on and limit price increases for customers. But still, he’s seeing fewer folks in the check out lines.
“I'm losing some customers just because they can go to a big box chain store and purchase their weekly groceries cheaper than what they could purchase here,” Kimball said.
Research from the University of Illinois Urbana-Champaign backs up that observation; consumers are changing their behavior to cope with rising food prices.
Survey respondents reported in November that they were switching to cheaper brands, cutting back on non-food and restaurant spending, going to cheaper grocery stores and using other methods. On average, consumers adopted 3.4 practices to save money on food.
People with lower incomes reported doing more to handle high food prices, with some skipping meals, starting to use government assistance or finding help at a food bank or pantry.
Maria Kalaitzandonakes led the study and said she was struck by how consumers are taking on multiple strategies to cope with high prices.
“None of these are particularly easy or straightforward things, they all affect your daily life and choices,” she said. “People are actively changing their behavior and switching away from important foods.”
Kalaitzandonakes noted that her more recent research found nearly 70% of people said inflation was affecting them more than it was in November.
The instability comes at a time when the federal government recently stopped providing extra food benefits, removing at least $95 from monthly budgets. And as some Republican lawmakers explore cutting benefits or strengthening work requirements to the Supplemental Nutrition Assistance Program as Congress negotiates the Farm Bill.
Jonathan Coppess is an agricultural and consumer economist and leads an agriculture policy program at the University of Illinois Urbana-Champaign. He co-authored the behavior study with Kalaitzandonakes. He said it’s crucial to focus on what food assistance means for more than 41 million people, instead of getting distracted by budget projections.
“We hear these huge numbers of $1.2 trillion going toward food assistance, and we lose a more important part of the policy,” he said. “We overlook some of the tough decisions of choosing between paying a bill, putting gas in the car or eating. And that’s where people are skipping meals.”
Potential food assistance cuts would be “hearotbreaking” to Cathy Nestlen, who runs communications at the Regional Food Bank of Oklahoma.
“It is the country’s most important anti-hunger, anti-poverty program,” she said. “It literally keeps families and children out of poverty.”
Nestlen has been seeing the impacts of high food prices since last summer. More people have been coming in for help feeding themselves and their families, and she’s worried about how continued high prices will collide with the end of extra food benefits.
“The timing could not be worse, with inflation still what it is,” Nestlen said. “People are scared. People are already down to one or two meals a day.”
Nestlen said the food bank is also grappling with high prices — donations are down and they have to foot the bill for increasingly pricy pantry items.
“But we’ve made the commitment to feed our community, and we’ll still absolutely have food to provide through our partners,” she said. “No doubt about it.”