A can of soup costs $4.99! Will California food prices ever get back to normal? | Opinion
When it comes to groceries, each of us has a tipping point.
You know what I mean — that moment when you absolutely, positively refuse to pay one penny more for a particular item that used to cost way, way less.
No matter how much you’ve been craving it, you walk away — resolving to either find a cheaper replacement or go cold turkey rather than succumb.
It could be potato chips that set you off ($5.99 for Ruffles sour cream & onion).
Canned soup (Progresso goes for $4.99).
Breakfast cereal ($6.49 for a smallish box of Raisin Bran).
Or green onions (up to $1.99 a bunch in some stores).
My trigger is Rosarita refried beans ($2.69 a can at the neighborhood grocery where I shop).
$2.69 is practically $3, which is roughly twice what as I used to pay back in pre-COVID days. (At least, that’s how I remember it.)
I wrote to Conagra Brands — the company that makes Rosarita products — hoping to be reassured this was just a temporary fluctuation.
Here is the rather bland reply: “You may be aware that costs to make many of our products have increased due to inflation. Sometimes we need to offset these costs by adjusting our prices when we sell products to retailers.”
Could it be that $6 bags of potato chips and $3 cans of refried beans are the new normal?
Sadly, the answer appears to be yes.
“Are you going to see your refried bean prices go down? Probably not,” said Ricky Volpe, an ag economist and associate professor at Cal Poly.
“The best we can hope for is that food price inflation is going to continue to slow down,” he said.
‘The consumer is going to be very happy’
Here’s what the U.S. Department of Agriculture is saying in its forecast for 2024: “Food prices are expected to continue to decelerate but not decline in 2024. In 2024, all food prices are predicted to increase 2.1 percent... Food-at-home prices are predicted to increase 1.0 percent... and food-away-from-home prices are predicted to increase 4.4 percent.”
In other words, if you want to save money, stay home.
According to some economists, the drop in food inflation is something to celebrate.
“The consumer is going to be very happy — if the consumer is ever happy sometimes as there are perpetual grumblers — because they are going to see much lower food inflation,” Wells Fargo chief ag economist Michael Swanson told agweb, a farm industry news site.
At the risk of sounding ungrateful, that isn’t good enough.
When it comes to food, it isn’t just lower levels of inflation we’re looking for. We want to see food prices fall across-the-board.
We (or is it just me?) want the everyday price of Rosarita refried beans to go down to, say, $1.89 a can. That I could live with.
Labor and transportation are among key cost factors
Some prices are falling — slightly.
Pork products, including sausage and and bacon, dropped between 2% and 4% over the past year, according to the consumer price index.
Eggs fell 14.5% from their high at the beginning at the beginning of the year, when a strain of bird flu diminished the supply.
But overall, grocery items rose 3.7%, and food “away from home” — which includes things like school lunches and vending machine items — rose 6%.
Don’t blame farmers; they have not been reaping any benefits from higher prices at the supermarket.
“If you buy food at the supermarket, USDA data say only about 12 to 15% of what you spend in the supermarket represents farm level contribution,” Swanson told agweb. “So almost 90 cents of the dollar is somewhere else. When you go to the restaurant, it’s almost in the 3% range. So when you’re buying food at the restaurant, literally almost nothing is going back to the farm level.”
Economists say some of the main factors driving up prices are labor, transportation, shipping and packaging.
“At the core of it, you can say it boils down to labor,” Volpe said.
Take trucking.
According to the American Trucking Association, the industry was short 80,000 drivers in 2021, and that figure could double to 160,000 by 2030.
Looming retirements — the average age of a truck driver is 47 — and difficulty attracting a more diverse work force are a couple of issues. Despite heavy recruitment, truckers are still overwhelming white and male; only 8% of truck drivers are women, according to Zippia, an online recruitment service. Younger millennials and Gen Zers have not shown much interest in the career either; the average age of new hires is 35.
Volpe expects self-driving trucks will eventually become commonplace, which will solve the labor shortage and bring down prices, but that’s many years in the future.
Until now, food has been a relative bargain
Another thing to keep in mind: According to the consumer price index, over the past 20-25 years, food prices have risen less than other items, Volpe said.
That means we have been somewhat spoiled because food has been a relative bargain compared to other items, but now grocery prices are catching up.
That doesn’t make supermarket sticker shock any less painful, but it does put it in perspective.
And it’s not like there aren’t alternatives.
We can buy potatoes and make oven-baked chips. Cook up a batch of homemade soup. Eat oatmeal instead of cold cereal. We can even try growing our own green onions.
As for refried beans, does anyone have a good recipe?
This story was originally published November 5, 2023 at 5:00 AM with the headline "A can of soup costs $4.99! Will California food prices ever get back to normal? | Opinion."
