These families thought food inflation was bad in 2021. It only got worse

These families thought food inflation was bad in 2021. It only got worse

Tope Alake, Tatiana Freitas, Pratik Parija and Olivia RockemanBloomberg News

When Nafisat Ekerin’s weekly grocery bill soared to 20,000 naira last June, up from 12,000 the previous year, her family of five made major cuts: fewer eggs and beans, watered-down hot chocolate, no more fruit for the baby. After she found herself pleading with market vendors for price cuts to keep her children fed, the fashion designer in Lagos, Nigeria, didn’t think it could get much worse.

And then it did. In the year since, Nigeria’s currency has continued to depreciate while food prices are up another 21%, forcing households like hers to make a new round of dietary sacrifices even sharper than the first.

“My food budget is double now, so I spend about 40,000 naira ($96) and even with that, you are not getting everything,” said Ekerin, 37, whose family is living on both her salary and her husband’s. Her children won’t stop asking for bread, which now comes in smaller packages for more money. Sometimes, when her family eats in the morning, they skip lunch and hold out for dinner. “You don’t eat what you feel like eating, but what is available.”

Hers is one of several families — in Nigeria, India, Brazil and the US — that Bloomberg interviewed several times between June and August last year about the swaps and sacrifices they were making in order to keep food on the table as prices rose. It turns out, chronicling what was then eye-popping food inflation wouldn’t even capture the depths of what was to come.

In the 12 months since, there have been worldwide labor shortages, soaring energy costs and, of course, Russia’s war in Ukraine — propelling world prices for kitchen staples to new records and dragging family finances and diets along for the ride.

Read the 2021 story: Soaring Cost of Food Is Forcing Families to Scrimp at the Dinner Table

Although a United Nations index of world food costs fell almost 9% between June and July, largely read as an encouraging sign, the measure is still 13% above where it sat a year ago. The index tracks export prices for raw goods and excludes retail mark-ups, meaning consumers in many regions are finding themselves paying the same high prices as ever. Global food giant Nestle SA just pushed through another round of price increases on consumers during the second quarter as its own costs increased. Conagra Brands Inc., the Chicago-based maker of Birds Eye frozen vegetables and Slim Jim jerky, said it plans to keep raising prices even if it dents demand.

The consequences of prolonged food inflation could be severe: A whopping 9.8% of the world population was affected by hunger last year, up from 8% before the pandemic, according to the recently released State of Food Security and Nutrition in the World (SOFI) report. With scorching temperatures hitting crops around the globe this growing season and Ukrainian grain shipments only just resuming after months of delays, world hunger levels for 2022 continue to look dire.

“All of us hoped that this year would be better,” said Akrur Barua, an economist at Deloitte Research & Insights. “There were promising signs of growth and economies moving up — and we haven’t seen that. It’s still quite volatile.”

Brazil

For Izabel Francisca Teixeira Valdeci, a 61-year-old civil servant in Guarulhos, a city bordering Sao Paulo, prices for just about every item on her shopping list are now higher than a year ago, including staples like rice, beans, meat and soybean oil. Beef — one the main sources of protein for her family, like in many Brazilian homes — is now rarely consumed. Cheaper chicken and pork are more common; even offal has entered her diet amid soaring meat prices. Brazil is one of the world’s largest producers of agricultural commodities, yet its own residents are having a hard time affording its bounty. The country’s food and beverage prices were up about 15% in July compared with this time last year.

“I haven’t prepared bife à rolê for months,” she said, referring to a favorite family recipe where carrots and bacon are rolled tightly in a strip of beef. “I used to make lasagna on weekends. I don’t do it anymore because cheese and ham are too expensive.”

A year ago, Valdeci started buying yogurt, butter and cheese right before their expiration date at a discount and freezing the products to extend their shelf life. She’s still employing that strategy, though the fancier Greek-style yogurt that she reluctantly cut from her family’s diet a year ago never made it back.

“Nowadays, we take the money in a big bag to the supermarket and bring the items back home on our hands. It’s the opposite of what it should be,” she said.

India

More than 9,000 miles (14,500 kilometers) away in Talcher, India, Bijaya Kumar Nayak should be in a better situation than he was last year. As the local government eases restrictions on business hours during the evolving pandemic, his income has more than doubled to as much as 1,200 rupees (about $15) per day. Still, that’s less than half what he used to earn before the first lockdowns. He’s behind on electricity payments for both his house and his mom and pop shop.

“I am not the only person who is facing the dire situation of a loss in income. Most of my friends and neighbors are also in the same boat,” Nayak, 54, said when re-contacted this year. “At the same time, prices of food items have risen sharply, and that’s a misfortune and hurting us.”

India is the world’s biggest buyer of edible oils and relies on imports for about 60% of its needs. The nation is also the top consumer of sugar and milk and second-largest user of rice and wheat. To help keep its population fed, the government imposed export curbs earlier this year on wheat and sugar to safeguard domestic supplies. Officials have also cut taxes on some edible oils and petroleum products, helping to lower food prices that account for about half of India’s consumer price basket. The government’s subsidized food program, the world’s biggest, is also a saving grace for families like Nayak’s. But it’s still not enough.

His two school-aged children, who used to split half a liter of milk before bed in pre-pandemic times, have gone without it for a year now; they’ve finally stopped asking. Even more painful for Nayak: He’s had to move his 7- and 9-year-old sons from a private school to a free government one because he could no longer afford the fees. “It’s really heartbreaking to lower the quality of education that one seeks to provide to their own kids, but the fees were out of my reach and I couldn’t do much on that front,” he said.

Nigeria

Back in Lagos, Ekerin is also slashing her education budget, keeping her toddler at home instead of at the Montessori pre-school program she’d prefer. “I am his teacher for now,” said the mother of three.

Her older children aren’t immune either as prices go up. After a recent visit to her mother’s house in the inland city of Ibadan, Ekerin’s eldest cried and begged to stay, unaware the older woman had been making sacrifices to feed the children, too.

“She didn’t know that grandma is also managing, because she didn’t follow her to the market,” Ekerin said. “She just thought that she has surplus food.”

US

The US family in Columbia, South Carolina, that Bloomberg spoke with in 2021 didn’t return requests for a check-in one year later. But like other households, they’ve likely been slammed with the kind of runaway costs many Americans haven’t experienced before in their lifetimes.

Food prices in the US have been rising at a double-digit clip for three straight months. In July, they  climbed 10.9% from a year ago, the most since 1979. Food-at-home, a category that excludes expenses like restaurants, is up even more. Economists tend to more closely watch the so-called core CPI figure, which strips out the more volatile food and energy components, but everyday items like food aren’t really an expense shoppers can avoid.

In fact, soaring costs at the grocery store, paired with high gasoline, housing and power prices, have forced many American households to load up on credit cards and drain savings. An estimated 34 million US consumers, or roughly 13%, spent more than they earned in the first half of the year.

While some inflationary pressures are starting to subside, any unexpected supply problems could start to ratchet things up again, according to Alberto Cavallo, an associate professor at Harvard Business School. For example, a “worsening of the war in Ukraine,” he said. “Any cost shock is likely to continue putting upward pressure on prices.”

This article originally appeared in Bloomberg

Report

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments