Inflation Worsens, Fears of Shortages Grow as Food Prices and Production Costs Rise
Headline Roundup March 24th, 2022
While high-priced groceries continue to roil consumers, rising food production costs are hampering farmers and stoking widespread uncertainty.
Global food prices hit a record high in February, rising 20.7% from a year before and over 40% from two years ago. Meanwhile, according to The Fertilizer Institute, common fertilizer prices rose from $200 per ton in July 2020 to over $600 per ton in February 2022. In addition to high prices, farmers have also been impacted by supply chain disruptions that continue to delay orders of key agricultural machinery. Russia's invasion of Ukraine spurred global wheat prices to hit record highs last week, driving more market instability and fears of shortages. Before the conflict began, Russia and Ukraine combined to produce roughly 26% of the world's wheat. The UN Food and Agriculture Organization warned last week of a potential food crisis amid the conflict and persistently high prices across the globe.
Many reports highlighted high food production costs and frustrated farmers alongside coverage of persistent inflation. Sources across the spectrum quoted farmers who said that despite high prices, they're struggling to sell products and may have to cut production. Left-rated sources were more likely to highlight concerns about food shortages and high prices in a global context. Some right-rated sources focused more on how Russia's invasion and high production costs are affecting U.S. farmers.
Beep, beep, beep. It’s the familiar sound of food scanned and placed into bags at your local grocery store. You just went in for a few things and meant to keep it under $100. But you walk away with a new case of sticker shock and fewer bags than $100 used to buy.
Inflation has hit every link of the food chain, such as diesel that fuels tractors in the field, and the trucks that deliver food from farm to the food processor, to the warehouse, and then to the...
The price of everything that goes into producing crops is surging, threatening to further fan global food inflation.
Food production costs were already high. The pandemic snarled supply chains, making it more difficult — and expensive — to get parts and supplies that are vital for growing crops. Then Russia’s invasion of Ukraine took things to another level, sending markets soaring for fertilizers and for the fuels needed to run farm machinery. Inflation is so rampant that even with rising food prices, farmers are facing increasingly tough margins.
That’s the problem for Eddie Smith,...
Higher wheat prices should make farmers like Nicole Berg, the owner of a 21,000 acre farm in Washington state, happy. But the costs of fuel and fertilizer are eating into her profits.
“The issue we’re having right now is that input costs are going up even more than the price of wheat,” Berg told CNBC in a recent interview.
Berg, like many farmers, is also constrained by the agriculture equipment market, which has been hit with supply chain disruptions that continue to delay orders of key machinery needed to plant and...