How Price Increases in Food Affect the Community

The price of food has been increasing all over the United States.

Energy and Economics

According to Thomas Garr, an economics professor at Kennesaw State University, energy prices are one of the big things causing the food increases. Oil-related products are used to power tractors to operate and harvest food. Then the truck transporting it to wherever it needs to go also needs fuel. That, in turn, means the price they must sell the food to the end customer will be higher.

“There’s a lot of chatter that gas prices have come down,” Garr said. “They’re still massively higher than they were two years ago. We’re not refining as much energy; we’re not producing as much oil.”

The second thing driving commodity prices is the conflict in Ukraine. They are one of the leading world exporters of grains and vegetable oils. Even though shipments haven’t yet been affected, Garr expressed concern that commodity prices will rise in anticipation.

Fertilizer is also something produced in Ukraine. The World Bank reported that fertilizer prices in 2022 rose nearly 30%.

Food Manufacturing Plant

The price of meat products has gone up and down, according to Michael Karakos, with Country Ranch Foods. They mainly sell to distributors: Cisco, US Foods, Kroger, Ingles, and various restaurants. They’ve been affected by the turkey increasing due to the avian flu viruses. However, chicken prices have gone back down.

“The biggest issue with inflation, to me, is labor and fuel costs,” Karakos said.

When fuel went up, companies started using more corn to make gasoline. Cows, chickens, pigs, and anything that eats corn went up with it. When Country Ranch food increased their prices, Karakos said they experienced a lot of backlashes with their customers.

“I had a conversation with a customer yesterday that we make turkey for, and he was like, he might have to cut back on how their menu cycle runs and reduce the turkey because he loses money on every meal that has turkey,” Karakos said.

Restaurants

Randy Elias, the owner of Moe’s and Aloha in Acworth, was almost put out of business when he couldn’t raise his prices fast enough in 2022 to keep up with the demand for increased commodities. In the last 18 months, chicken has doubled, and cheese tripled. So while he is “finally” back to pre-covid numbers, it has been just surviving for him for the last several years.

“Our main complaint now is that prices have gone up, but portions have stayed the same, which is the reality of our world today,” Elias said.