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Why you’ll keep seeing inflation in the grocery aisles

Maria Halkias, The Dallas Morning News on

Published in Fashion Daily News

Sriracha sauce may be in short supply just for a couple of months after a drought in northern Mexico stunted pepper plants.

Tampons may be mostly a social media-manufactured shortage, not the factory kind. Baby formula shortages are painfully real but have nothing to do with backups at the Port of Los Angeles. Peanut butter shelf still empty? It was a regular old-fashioned manufacturer recall by Jif.

Shoppers never thought much about the supply chain until the pandemic disrupted it. Now some are finding it hard to determine what shortages are real and what’s chatter gone awry or made worse by consumers overreacting. And the kinds of shortages that have always been a part of life get conflated and blamed on “supply chain” issues that aren’t resolved.

But there are also new stresses on the supply chain due to Russia’s invasion of Ukraine, and experts say the future losses of that region’s wheat, corn and sunflower crops will continue to translate into higher prices in U.S. grocery stores.

“If there’s suddenly a lot less wheat in the world market, that drives up prices all over the world,” said Texas A&M agriculture economist David Anderson. According to the U.S. Department of Agriculture, through May, Ukraine is the world’s eighth-largest corn producer and has shipped about 90% of its expected corn exports for 2021-22. Ukraine is the world’s ninth-largest wheat producer, and while it has shipped substantially all of its exports through May, its exports for 2022-23 are expected to be down by nearly half.

“We aren’t talking about food shortages in the U.S., but we are talking about higher prices,” Anderson said.

 

Sunflower oil is a major export from Ukraine but isn’t used as much in the U.S. Ukraine normally produces one-third of the world’s sunflower oil and accounts for nearly half of global exports. In 2022-23, its share of global sunflower oil production and exports is projected to shrink to 21% and 35%, respectively. Top markets in 2021 were India (31 %), the European Union (30%) and China (15%), according to the USDA.

As far as wheat and corn, there’s an annual surplus in the U.S., but prices are still expected to go up. The U.S. is an exporter of both crops, Anderson said, but a domestic abundance doesn’t matter when prices are based on global supplies. Crop commodity prices are similar to oil prices — they’re global.

Anderson explains the impact by walking us through a traditional American supermarket.

The outside walls of the store are filled with refrigerated meat, dairy and eggs cases. Feed is the most expensive part of producing livestock, Anderson said. Hogs and chickens eat corn and soybean meal, which is more expensive because of the war in Ukraine. That pushes up the prices on chicken and pork.

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