What Was That Total Again?
Like many of you, I am still taken aback by the price of my weekly groceries, especially since I often shop at a store that prides itself on lower food costs. Though prices there do tend to be less than most chains, I can remember not that long ago when the same type and amount of food there was much cheaper, almost 30% less to be exact, back in 2019.

© Prostock-Studio from Getty Images via Canva.com
We are so blessed with abundance in this country that we often don't give much thought to our food and necessities supply; not until something disrupts it, that is. Who can forget when, at the beginning of the pandemic, the toilet paper hoarders of the world emptied the shelves at local stores for months. What had been an inviolable assumption (toilet paper will always be available) went to an OMG moment of, "What if I can't find any?" Those were not fun days.
There are still some of those moment now, such as when egg prices keep breaking records over and over, and when the total on our checkout line bill is far more than we were expecting. If we are not aware of all the dynamics that can contribute to food prices, though, we might assume or be led to believe that a single culprit is responsible for making our meals more expensive, when in actuality it is not.
For this and other reasons, it's important to dig down a bit into the major causes of why we're experiencing much higher food prices than we did a few years ago, and how those factors work together to make things that way.
Some Famous Food Crises in History
First of all, I'd like to take a quick look back in history to some other times when food was expensive; so expensive, in fact, that the crisis prompted people to overthrow their government. One of the most well-known instances sparked the French Revolution in the late 18th century. Over-priced bread became a symbol of the broader economic struggles faced by the common people. Multiple poor harvests and an ineffective government made things even worse. As the cost of bread continued to rise, it eventually ignited such anger that it lead to the storming of the Bastille and eventual overthrow of the French monarchy.

The Russian Revolution of 1917 is another famous example of where food scarcity and high prices played a critical role in a government's downfall. The hardships experienced by the working class, due in part to food shortages and inflation, fueled revolutionary sentiment against the Tsar. As bread and other basics became increasingly difficult to obtain, people's frustration boiled over, leading to strikes, uprisings, and eventually the end of the Romanov's rule.
We don't need to go back hundreds of years to find examples of this situation either. In 2010, the rising prices of basic food items in countries like Tunisia and Egypt contributed to widespread unrest. The frustration over food insecurity, combined with high unemployment rates and government corruption, led to mass protests that ultimately resulted in the ousting of long-standing leaders.
Understandably, people are driven to action when many of them are hungry and find their government not assisting with this most basic need. When access to affordable food becomes a struggle, it can lead to a breakdown of trust in government institutions and a demand for political change. It is important to understand, however, why the high prices actually exist and what can actually be done to fix them. Gaining this kind of understanding places the responsibility on the right shoulders and expedites solutions to the problem. That being said, let's look at some of the contributing factors to our current situation.
Supply Chain Problems Are Still An Issue
Not that long ago, I would guess that most of us hadn't given the term supply chain that much thought. Then came the pandemic, and you couldn't go 24 hours without hearing some mention of it. Though COVID-related disruptions have mostly settled down, there are many other issues that can cause problems; and like a row of dominos, an issue with one piece of the global chain is sure to affect the rest.
Transportation bottlenecks, for one, have emerged as a major concern. Ports have experienced ongoing congestion due to a surge in shipping volumes, coupled with a scarcity of shipping containers. Congestion delays the arrival of goods and causes shortages in stores, driving up prices as demand outstrips supply.
Additionally, when higher fuel prices increase transportation costs, companies may seek to optimize their logistics strategies, which can lead to changes in shipping routes, modes of transport, and inventory management practices. For example, a business could shift from more expensive air freight to cheaper sea freight, which would result in longer delivery times. Such adjustments can disrupt established supply chains, causing delays and uncertainty in delivery schedules, which ultimately affects the end users.
Weather Patterns, They Are A Changin'
Whatever your take on climate change may be, there is no denying that we are seeing more extreme weather patterns than we did just a few decades ago. Overall, the number of catastrophic disasters in the US have increased from an average of 3.3 a year in the 1980s to an average of 17 a year from 2014-2022. That number has increase to 22 in 2023 and 27 in 2024. It is not difficult to see how a series of hurricanes in Florida or a rash of fires in California can influence the cost of certain produce items in their aftermaths.

© Antonio Gravate via Canva.com
Growing seasons and the geographical distribution of certain crops have changed as well. I remember seeing a 60 Minutes feature a couple of years ago about what traditional wine growing areas were experiencing as a result of overall temperature changes in their regions. These farmers and others like them are being forced to adapt to the new normal, and this kind of adaptation often comes with significant upfront costs, which are then passed on to consumers.
Related to the previous section on supply chain problems, climate issues also affect the logistics that are crucial for getting food from farms to consumers. Increased frequency of severe weather events can disrupt transportation networks, leading to delays in the delivery of fresh produce and other perishable goods. When supply chains are interrupted, the scarcity of certain items can drive prices up as demand outstrips supply.
All of These Diseases
Outbreaks of diseases, whether they are related to livestock, crops, or human health, can significantly disrupt the production and distribution of food products. For instance, when livestock contracts diseases like avian influenza or swine fever, it can lead to the culling of affected animals, which in turn reduces the overall supply. This decrease, coupled with consistent or increasing demand, naturally drives prices higher.

© JohnnyMad from Getty Images Signature via Canva.com
This situation is exactly what has affected the soaring price of eggs. When avian (or bird) flu enters a particular flock, the farmer has a choice of either trying to save the healthy birds or destroying the entire population and starting over. Since farmers are compensated when they put down their birds due to an epidemic, many of them have chosen this route, thus greatly affecting the egg supply in the short run.
Additionally, the impact of plant diseases on crops can be equally detrimental. When crops are affected by diseases like blight or rust, farmers may experience substantial losses in yield. This situation not only affects their immediate income but can also lead to a scarcity of certain fruits and vegetables in grocery stores. Referencing the above section on climate change, we are currently experiencing an uptick in this issue, due to more extreme weather conditions. Scientists are working on ways to counter the problem, but it will continue to affect prices for the time being.
The "I" Word
Though inflation has come down significantly in the last number of months, it is still an ongoing issue. Everything we have talked about so far--supply chain problems, extreme or changing weather patterns, and disease--are significant contributing factors to this economic challenge.
In addition, the cost of labor is another critical component of the inflation equation. Before the pandemic, many industries had not given their workers a cost of living raise in years. Post pandemic, workers were able to demand these raises because of the scarcity of labor that a number of industries experienced. Naturally, many of the businesses that incurred higher labor expenses decided to pass the cost on to maintain their profit margins, which resulted in consumers paying more for many things, including groceries.
Consumer behavior during inflationary periods can also drive prices higher. As people become more concerned about rising costs, they may stock up on certain items, leading to increased demand. This surge in demand can create a supply shortage, prompting retailers to increase prices further. Inflation also didn't seem to hold us back on spending during the holidays this last year, either. Whether people were just putting less into savings or racking up credit card debt, a lack of thriftiness can also contribute to the ongoing inflationary conundrum.
Corporate Contributions
In recent years, many large grocery chains have opted to consolidate their operations, leading to fewer competitors in the market. The reduction in competition (never a good thing for capitalism!) allows them to set higher prices without the fear of losing customers to rival stores, which can result in a significant increase in the overall cost of groceries for consumers. You may very well have seen this situation occur in your area, such as when Kroger bought out Harris Teeter in my neck of the woods a few years ago.

© purple_queue from Getty Images via Canva.com
Corporations also frequently engage in cost-cutting measures that can negatively impact the supply chain. For instance, decisions to minimize inventory levels or rely on just-in-time delivery systems can lead to shortages and, consequently, higher prices. When stores run low on stock, they may raise prices to balance supply and demand, further burdening consumers.
A shift in sourcing strategies can also be a contributing factor. When corporations opt for suppliers that offer lower prices but not the same quality or reliability, the result of inconsistent product availability can drives prices up. Global supply chain disruptions, exacerbated by corporate decisions to rely heavily on international suppliers, have also led to delays and increased shipping costs, which are often passed down to consumers in the form of higher prices.
Lastly, the impact of inflation cannot be overlooked. Corporate decisions regarding pricing strategies in response to inflationary pressures can lead to a cycle of price increases. As companies adjust their prices to maintain profit margins in the face of rising costs for labor, transportation, and raw materials, consumers are left to bear the brunt of these decisions, resulting in a significant rise in grocery prices across the board.
So What Can Be Done?
The US is nowhere near the same point that people were during the famous revolutions mentioned at the beginning of this post. We are, however, feeling the pain enough to let it influence our vote. The economy, and specifically grocery prices, was a top issue once again during the 2024 election. As you can see, though, higher prices are much more involved than simply which party or person is currently in power and, despite campaign promises to the contrary, the US President has little or no influence on that reality.
The question is, what steps can be taken to resolve the issue? Based on the contributing factors I have listed above, there are several practical areas that can be addressed and are within your power to do so:
Rethink which groceries you purchase. Most of us, myself included, give in to purchases of convenience, which are typically more expensive. While we don't always have time to prepare homemade meals, some planning and a list can go a long way toward not only reducing our food bill but providing us with healthier choices. There are many websites available to help us do just that; here's a list and review of a number of these sites.
Shift some of your spending to local suppliers. Instead of defaulting to big box stores, check out your local farmers' market. Not only will you cut out the middle man and negate the global supply chain issue, you will also contribute to your community and your neighbors' economic welfare. For more on this subject, see our previous post on food co-ops.
Support legislators that encourage competition and common sense regulation. While sometimes necessary (as in the case of power companies), monopolies are not generally friends of mutually beneficial capitalism. To counter these kind of entities, support local, state, and federal representatives who are truly working for your best interests, which includes not allowing big corporations to grow even bigger by consolidating their industries. In addition, support those leaders who will enact reasonable, common sense regulation that ensures consumer protections.
There are other ways in which our food price concerns can be addressed, and we welcome you to share your thoughts with us at info@bettercapitalism.org. I hope this post has given you some food for thought the next time your do your weekly shopping.

Not sure? Let's schedule a call and talk.
⭐⭐⭐⭐⭐ Our Amazon number 1 new release: Unleash more with Better Capitalism: Jesus, Adam Smith, Ayn Rand, & MLK Jr. on Moving from Plantation to Partnership Economics.
"This book merits close, sustained attention as a compelling move beyond both careless thinking and easy ideology."—Walter Brueggemann, Columbia Theological Seminary
"Better Capitalism is a sincere search for a better world."—Cato Institute
Comments