The cost of groceries in the U.S. has now reportedly jumped 1.8% from a year earlier in December, growing at the quickest pace in more than a year, according to Labor Department data released last week.
The cost of food overall was 0.3% higher in December, after climbing 0.4% in November.
There isn’t one factor. Bird flu is killing chickens, decreasing egg supplies and boosting wholesale prices to a record.
Extreme heat and dry weather in the world’s coffee-growing regions have driven the cost of brews skyrocketing. Chocolate and cereal producers have boosted prices for their products, too.
It is an issue for consumers, who are still acclimating to a stretch of brutal inflation following the Covid-19 outbreak.
Shoppers are picking up more store-branded groceries and browsing different stores for the greatest discounts.
Grocery costs in December were nearly 28% more than they were five years earlier, according to the Labor Department.
An rise in the speed of food inflation provides a challenge for the incoming government. President-elect Donald Trump campaigned on consumers’ dissatisfaction with inflation, yet more lately has recognized it could be hard to cool soaring supermarket prices.
Some of the causes underpinning food costs, such as disease and severe weather, don’t have easy policy remedies.
Trump’s threat to put tariffs on imports from Canada, China and Mexico, among of America’s largest trading partners, could further roil food-commodity markets.
Eggs are one of the key drivers of food inflation. The index for eggs was up 37% from a year ago, according to the latest Labor Department numbers, and the average retail price of a dozen big eggs jumped over 14% to $4.15 in December.
The price surge is driven by the most lethal avian influenza outbreak on record, which commenced its spread on U.S. farms in 2022.
The seasonal rises in egg prices are mostly attributed to the migration of wild birds, such as ducks and geese, during winter, which facilitates the transmission of the virus to farms.
To curtail the virus’s transmission, entire flocks are exterminated following the confirmation of an infection.
Due to the constrained supply, the demand for eggs often reaches its zenith in December as grocery retailers and food producers prepare for the holiday baking period.
Price escalations have contributed to the profitability of egg firms, notably Cal-Maine, the largest egg producer in the U.S., whose stock has appreciated double over the previous year.
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