The coronavirus (COVID-19) pandemic had wide-ranging effects on U.S. consumers in 2020, including on the prices they encountered at the grocery store. Food-at-home price inflation was above average in 2020, primarily as a result of the pandemic. Grocery store food prices increased by 3.5 percent, on average, from 2019 to 2020. For context, the 20-year historical level of retail food price inflation is 2 percent per year—meaning the 2020 increase was 75 percent above average. This level of retail food price inflation was last realized in 2011, when poor weather, low commodity harvests, high fuel prices, and international trade disruptions increased global food prices.
Prices for every major food-at-home category except fresh fruits increased in 2020. Fresh fruit prices dropped 0.8 percent from 2019 because of domestic and international shifts in supply and demand. For example, stay-at-home orders in India, China, and Taiwan created port delays and staffing issues in the produce supply chain, decreasing the capacity to import U.S. fruit—particularly apples, grapes, and cherries. In the United States, the market for fruit shifted from foodservice outlets, such as restaurants and caterers, to retailers during the pandemic, contributing to an increased supply and reduced prices at grocery stores. Consumers also purchased fewer perishable products during quarantine. “Fats and oils” was the only other food category to experience lower inflation than its historical value—likely as the result of high soybean yields and decreased demand for frying oils because of COVID-19.
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