Expert: Food prices are going up 'three times what we’re used to in the last decade'
Americans — especially those on tight budgets – are feeling the pinch from rapidly rising grocery prices not seen in years, according to one expert, who offered a few tips to counter food inflation at the supermarket.
"We're seeing 5-6% food inflation in the U.S., three [times] what we’re used to in the last decade," Wells Fargo Chief Agricultural Economist Michael Swanson recently told Yahoo Finance Live. "It's having a bigger impact on fixed income and also people that are used to using some governmental supplement income."
The food supply chain breakdown and labor market shortage are to blame, Swanson said. To retain workforces, food manufacturers and producers are paying higher wages and shoppers are footing the bill in the form of heftier prices.
“We're seeing a permanent move up in labor costs,” he said. “With higher labor costs at restaurants and in the food manufacturing world, it makes your labor in the kitchen more valuable.”
How to save
Remarking that “Americans always love the convenience” of prepared or delivered meals, Swanson said there’s a savings opportunity by buying minimally or unprocessed foods to avoid the labor surcharge.
Home chefs who incorporate more basic ingredients like potatoes and other root vegetables are what Swanson called “careful shoppers” because the lower costs of the products provide a greater value for efforts in the kitchen.
Another way to cut the grocery bill is to shop locally to skirt shipping costs. Swanson said any food grown, produced, and processed locally will not be burdened by additional costs associated with the ballooning food transportation rates across the country.
“We’ve seen the truck rates from the West Coast to the Northeast go from the $3,000 range to $10,000 plus,” he said.
But not every grocery list staple is more expensive. The price of milk is cheaper than it was last year, Swanson shared. However, households that eat animal proteins are seeing higher costs. Turkey — the Thanksgiving centerpiece — is especially going to be more expensive than in previous years.
“Luckily we only do [Thanksgiving] once a year, so do it right,” he said.
Stephanie is a reporter for Yahoo Money. Follow her on Twitter @SJAsymkos.
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