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Global Food Prices Nearing Record High

Steven Li is a medical professional with a passion for lifelong learning and spreading truth to the world. He specializes in the fields of health and science.
Published: February 5, 2022
Global food prices are reaching record highs, statistics show. Causes such as inflated fuel prices and record labor shortages are attributable.
Low stock in an ASDA store on Oct. 9, 2021 in Cardiff, Wales. According to an Office for National Statistics (ONS) survey, 17% of adults had not been able to buy some essential food items over the preceding two weeks. (Image: Matthew Horwood via Getty Images)

Due to supply chain delays, the labor shortage, and pandemic-related disruptions, prices of foods such as meats, seafood, and produce shot up by 9 percent in 2021, according to data from IRI, a Chicago-based market research firm, reported by CNN on Jan. 31. Various products have been out of stock at different times over the past year, with the supply of soft drinks being especially limited recently.

Drivers of inflation

A record-high 100 cargo ships were backed up along the California coast in January, unable to offset the busy ports of Los Angeles and Long Beach, which unloaded 13 percent more containers in 2021 than ever before. The increased cost of workers, supplies, packaging, and transportation has exacerbated inflation, as well as the lack of workers and increased demand for goods.

Doug Baker, vice president of industry relations for The Food Industry Association (FMI) told CNN, “A lot of that is actually a delayed reaction from the [issues and volatility] that the supply chain has been feeling for the last several months. They put [it] off as long as possible, and now we’re going to feel the effects of that for the next few months.”

Several employees have fallen sick with Coronavirus Disease 2019 (COVID-19) or have been quarantined, decreasing the workforce in warehouses, processing facilities, and grocery stores. U.S. pork production, for example, dipped 8 percent in mid-January.

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The workforce shortage has led distributors to cut down on deliveries to grocery stores by as much as 20 to 40 percent. Fresh Encounter, a grocery chain based in Ohio, reported more than 40 percent of its orders had been canceled or delayed.

CEO Michael Needler Jr. of Fresh Encounter told CNN, “It’s been whack-a-mole. It’s one item one day, and then a completely different segment the next. Obviously, our customers are frustrated when they can’t get their items, but hopefully we’re able to have a substitute item for them.”

With regard to the labor shortage, CEO of beverage company Reed’s, Norm Synder, commented to the outlet, “You have a group of people that are all working in close proximity to one another. If one person gets sick, the protocol, because everyone’s exposed, is to shut down. So, we’ve had several instances where lines have been shut down for one or two weeks.”

Retired workers

Early retirement has come to the forefront as one of the major reasons why the labor market has not been able to recover to pre-pandemic levels. The number of “prime age” workers between 25 and 54 years of age has recovered to 82.1 percent in Nov. 2021, compared to 83.1 percent pre-pandemic, stated CNN in a separate Dec. 25, 2021 analysis.

In contrast, the number of workers above age 66 has remained much lower at 38.4 percent in November compared to 40.3 percent pre-pandemic in February of 2020. Altogether, the labor force participation rate was 63.4 percent in January of 2020, compared to just 61.8 percent in November of 2021.

Many workers over the age of 55 found themselves furloughed or laid off when the pandemic hit. When applying for new jobs, companies have favored younger and more educated individuals. Additionally, since they are in a higher risk group for COVID-19 due to older age, many decided to avoid applying for jobs with higher infection risk such as retail and food services.

Eurozone inflation

Inflation in the eurozone, a group of 19 member states of the European Union (EU) using the euro as their primary currency, spiked to 5.1 percent in the 12 months ending in Jan. 2022,  according to EU statistics agency Eurostat. The figure surpassed all expectations and was the highest since record keeping was initiated in 1997.

The main culprit was attributed to soaring energy prices, which rose by 28.6 percent. For example, gasoline prices surged in Germany, reaching a record 1.712 euros per liter, or approximately $7.31 USD per gallon. Simultaneously, economic growth in the region plateaued to 0.3 percent in the last quarter of 2021 as Omicron infections led to increased restrictions, reported AP on Feb. 2.