You might be blaming your grocery shopping woes on supply chain issues, but that’s not all there is to the story. According to the UN’s Food and Agriculture Organization, food prices have shot up worldwide. This is the highest they have been in a decade.
Below are the factors responsible for putting that dent in your monthly grocery bill.
Energy Prices Are on the Rise
There was a 29% increase in energy costs from 2020 to 2021. Food producers and manufacturers utilize energy in their day-to-day operations. When energy prices go up, so does the cost of food. Drought has also been known to drive up energy prices and has affected the cost of items like coffee and nuts.
Fertilizer Prices Have Also Gone Up
Potash, a fertilizer used by farmers, saw a 119% increase in its average price. As the cost of fertilizer rises, crops have become more expensive to grow. Those additional costs are passed on to the consumer, resulting in more expensive products on the shelf.
Companies Are Increasing Their Prices
Food manufacturers and grocery stores are raising prices. Kroger, the largest grocery store in the U.S., announced that it would pass on its higher running costs to the customers. In a similar move, Dollar Tree said store items would now be priced at $1.25, up from the $1.00 that they had been sold at previously. Meanwhile, manufacturers like Kraft Heinz and Campbell Soup Co. have increased the price tags on their popular products.