Inflation levels are now at levels the U.S. hasn’t seen in decades. The latest Consumer Price Index (CPI) showed a 6.2% spike over the past 12 months, the biggest increase in nearly 30 years.
The CPI shows it’s not just food items costing consumers more. From fuel to new vehicles, prices are surging with the year-to-date totals meaning U.S. shoppers haven’t experienced a price surge like this since 1990.
The latest CPI this week revealed the following price increases:
- Gas up 49%
- Fuel oil up 59%
- Used cars and trucks up 26%, the largest jump ever
- Retail pork prices up 14%
- Retail chicken up almost 9%
- Retail beef up 20%
“Meatflation”
The dramatic rise in meat prices was dubbed as “meatflation” by Bloomberg this week. And while consumers are seeing spiking prices, livestock producers aren’t benefiting from the price increase. In fact, pork producers have seen hog prices plummet as input prices have spiked.
Experts say the rising prices for consumers are all thanks to a mix of rampant demand, raw material shortages from processors and choke points along global supply chains.
Cutting into Consumers Record Demand?
So, what could the price pain at the store mean for consumers’ appetite of meat? So far this year, domestic demand has reached record levels. One Ohio State University agricultural economist doesn’t expect the prices to be a major hit on that overall demand picture yet.
“It might change some consumer demand in the long term, but overall, as people get adjusted, they try something they haven’t tried before, like curbside pickup and online grocery shopping, it has changed how shoppers are buying. But meat continues to be very popular product. So i mean, i don’t think that we’re going to see huge swings in that,” says Zoë Plakius, Agricultural and Food Systems economist, The Ohio State University.
Others aren’t sold on the fact higher prices won’t change consumers taste. In fact, if meat prices continue to climb, some think consumers may be forced to change their eating habits.
“What that means is that people are not going to be eating as well. They’re certainly not going to be eating out as much. They’re not going to be buying expensive items in the grocery. And you know, food, fuel, rental prices: these are what most people spend most of their money on,” says Rana Roroohar, Global Business Columnist and Associate Editor, Financial Times.
Outlook
Some economic analysts say relief could come if the pandemic eases significantly and more people get back to working in stores and offices.
As for the high prices and shortages of cars, experts say that will probably take longer to solve due to the computer chips used to make them are so specialized, and there’s just not enough of them getting to the U.S.
