After a 10-year period when inflation in America ran about 2% year over previous year, the cost of living in America has surged over 8% so far in 2022, based on the BLS’s Consumer Price Index. A few items have price jumps so high that they have helped pull overall prices up. Among foods, eggs are first on the list. In August, the price of eggs rose 40% compared to the same month last year. While egg purchases alone won’t bring down inflation, they are part of a short list of food products that will.
The reason for price increases fall into several categories. One of these is oil, although its price has dropped considerably this summer. The war in Ukraine led to a Russian shut off of oil to Europe, as revenge for sanctions put into place by these nations and the U.S. OPEC nations have been unwilling to up production and the U.S. producers cannot turn on supply quickly.
The prices of many foods are based on their components or the components used to grow them. Russia is the world’s largest supplier of fertilizer. Ukraine and Russia are among the largest exporters of grain. To make matters worse, U.S. crop yields this year were particularly weak.
Chicken feed is usually made up of wheat and barley. The cost of feeding chickens is passed on to the price of eggs.
The price increases of foods were recently part of the 24/7 Wall St. “The Price of This Household Item Is Soaring” which looks at CPI data from August. The price of butter was up 25%. The price of flour was up 23%. The price of soups was up 19%.
It may be that demand for the most expensive foods is falling which should curtail price increases. According to CNN, people have begun to eat less chicken, which is expensive, and moved to beef, which is not. People have also started to eat smaller portions, which is another way to undercut demand.
The American habit of having eggs for breakfast is unlikely to continue at its former pace or at least at the pace it used to.
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