WASHINGTON, DC - Inflation is the word on most everyone’s lips in the food industry, with rising costs nationwide posing greater challenges to the supply chain. As we reported in a recent interview with California Fresh Fruit Association, the produce industry is no exception. In a recent report, we learned that January marked the biggest annual inflation increase in 40 years.
According to Reuters, an interest rate hike of 50 basis points may be coming down the pipeline from the Federal Reserve. Increased costs across rent, electricity, and food are posing challenges to consumers, and those increases are impacting growers and producers as well. In fact, the food index rose 0.9 percent and the cost of food consumed at home rose 1.0 percent, with fruits and vegetables being strong contributors.
The report continued by noting that the Consumer Price Index (CPI) rose 7.5 percent in the 12 months ending in January, which is the biggest year-over-year increase since 1982. January also marked the fourth straight month of annual increases in excess of six percent.
As we know, trends spurred by the COVID-19 pandemic included increased spending as well as delays due to a lack in labor. However, Reuters reported that inflation could begin to slow as supply chain bottlenecks are eased and the Omicron surge dies down. The inflation is reportedly partially attributed to a delay in rising wages as a result of scarce labor.
As to how these costs are being transferred to growers, ANUK will continue to keep our ears open and our eyes peeled. What we do know is that these rising prices for the consumer inherently mean rising prices for production, which causes increased challenges for those who grow our food.
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