Why Are Food Prices Going Up?

You watch in disbelief as the cashier scans the items from your cart. Beep. Five dollars for a jar of peanut butter? Beep. Those tomatoes are double what they were last month! Beep. When did mac and cheese become a luxury item? And by the time you hear the grand total, your jaw is on the floor.

Trust us, you’re not the only person asking, “Why are food prices going up?” Grocery prices (and food prices in general) are rising, and everyone’s feeling the sticker shock. Suddenly, you’re having to get the generic brand of Oreos just to stick to your budget. It’s enough to make you throw a tantrum in Aisle 7—right next to the 5-year-old begging for a candy bar.

But don’t crash your shopping cart in a rage just yet. We’re getting to the bottom of why food is so expensive right now. Plus, we’ve got some ways to help you save money and make your dollars go further at the grocery store and beyond.

Why Are Food Prices Going Up?

From supermarket runs and restaurant meals to takeout orders and Girl Scout cookies, food prices have been steadily growing for decades. You might have even noticed packaged snacks getting smaller and smaller (it’s called shrinkflation).

But if it seems like everything edible has gotten even more expensive this year, that’s because it has. From November 2021 to November 2022, food prices went up a whopping 10.6%!¹

So, why is this happening? Well, there are a lot of ingredients that make up the recipe for food inflation—including supply chain issues, increased transportation costs, global unrest and even a case of bird flu.

All these things and more affect the number you see on your grocery receipt and restaurant check. But let’s break down some of the main causes happening right now.

Supply Chain Issues

Let’s face it, food production (along with everything else) slowed down due to the pandemic. And even as things get back to normal, we’re still seeing the effects from the last several years. Believe it or not, that package of beef doesn’t just appear at the grocery store like magic (if only it were that simple).

It all starts on a farm. And farmers have had a rough time getting the seeds, fertilizers, animal feed and equipment they need to grow and process all the delicious foods we eat. Plus, there’s currently a farming labor shortage and a lack of irrigation water to go around in some parts of the country.

But even though it’s taking longer to produce food, America’s appetite isn’t getting any smaller. And when people buy food faster than it can be produced, you guessed it—the prices on the shelves go up.

Transportation Costs

It’s hard enough growing and processing food. But getting it to you—the customer—is a whole other problem.

The cost of shipping goods in the U.S. hit record highs in 2022, mostly because there haven’t been enough truck drivers.² Add in insane gas prices and you’ve got a bigger price tag for transporting food to your local supermarket.

But not all the food we eat is produced in America. In fact, the U.S. imports about 15% of all its food.³ And even though ocean freight prices have started to cool down and there’s less congestion at the ports (aka ship traffic jams) than earlier in 2022, international shipping costs as a whole are still pretty high.⁴ That makes it more expensive to get foods like bananas, cocoa and coffee—which may explain why your daily Starbucks habit is adding up faster than usual.

Global Factors

The price of food also depends on the global market. Drought, fire, crazy weather and other natural factors can ruin crops and make food prices rise for everyone (even years down the road). And some countries have also limited trade to try to stop the spread of COVID-19 or prevent their own food shortages.

Try our free Meal Planner to save money on groceries!

There’s also the Russia-Ukraine conflict, which continues to affect the global economy—including the food industry. Almost a third of global wheat and barley comes from Russia and Ukraine, as well as two-thirds of the world’s sunflower oil. Ukraine is also a huge producer of corn.⁵

Obviously, Ukraine isn’t able to export much of anything right now, and other countries have put a ton of trade sanctions on Russia. We were relying on the goods that had already been imported before the war started. But now, we’re seeing the cost of things like bread, cereal and cooking oils start to go up.

Bird Flu

Have you tried to buy eggs or chicken lately? You’d think they were selling golden eggs with those prices! And that’s because there’s been a huge outbreak of the bird flu this year. It’s affected more than 49 million birds in 46 states, including a ton of egg-laying chickens, causing farmers to raise their prices.⁶

It'll probably be a while before these high prices fly the coop. But you still might be able to find cheaper eggs from local farmers if you live in areas where flocks haven’t been infected.

What Food Prices Are Rising the Most?

As you can see, there are many factors that can cause food prices to rise. But a lot of it has to do with the specific types of foods. So, which foods are going up the most?

Well, exactly how much you pay depends on your location and grocery store. But the Consumer Price Index keeps a record of the average food prices across America for each month. Here are the types of foods that have gone up in cost the most from November 2021 to November 2022:⁷

• Eggs: 49.1%
• Fats and Oils: 21.8%
• Dairy Products: 16.4%
• Cereals and Other Bakery Products: 16.4%
• Other Meats (Ex. Hot Dogs, Lunch Meat): 16.2%
• Processed Fruits and Veggies: 15.8%
• Poultry: 13.1%
• Sugar and Sweets: 13.1%

This increase doesn’t just affect grocery prices. You may even notice some extra dollars tacked onto the receipt at your favorite restaurant or fast-food joint. In fact, the price of food away from home increased 8.5% on average since November 2021.⁸ So much for those dollar-menu chicken nuggets!

When Will Food Prices Come Down?

We hate to be the bearer of bad news, but it doesn’t look like food prices are going to get much better anytime soon. While some production costs are getting cheaper here and there, the USDA predicts that all food prices will increase between 3% to 4% in 2023.⁹ Womp womp.

Hopefully, we’ll see supply chain issues and the bird flu outbreak slowly start to resolve. But between the ongoing war in Ukraine and labor issues right here in America, we’re probably going to be riding out the rising food price wave for a while.

How You Can Save on Food (Despite Rising Costs)

Okay, enough with all the depressing stuff. Yes, food prices are going up. But we’ve still got to eat, right?

The good news is, there’s still hope for your grocery budget. Because while you may not be able to control the price of food, you can control how you buy it. Here are some things you can do to combat inflation and save money on groceries.

Do your research.

Meal planning is a great way to make sure you’re keeping costs low and only buying what you need. Now more than ever, it’s a good idea to do a little research before you make your shopping list.

See what's in season and what’s on sale at your local supermarket. Are diced tomatoes buy three, get three free? Looks like you’re making salsa! You can save a ton of money just by planning your meals around weekly specials.

Use what you have.

Nobody likes wasting food—especially when throwing away one avocado is like throwing $3 in the trash. So, before you head out to the store, take a long, hard look inside your fridge and pantry. See if you can use what you already have to make a meal, even if you don’t have all the ingredients.

Got some rice? Add some beans to your list. A little bit of milk in the fridge? Use it to make pancakes. Leftover chicken tenders? Grab some tortillas and make tacos. Taking inventory each week will help you save money and keep you from throwing out perfectly good food. It’s a win-win!

Buy generic brands.

Even though prices are going up, you can still shave a couple dollars off the total cost by choosing generic brands. You might not be willing to give up your name-brand cereal or cookies right now, but most staples (like milk, canned vegetables, spices and flour) are practically the same.

In fact, Consumer Reports says most store brands are similar enough to the name brands in overall taste and quality—and they’re usually 20% to 25% lower in price.¹⁰ Just be sure to compare prices while you’re in the aisle so you know you’re actually saving money.

Switch up where you shop.

Higher prices are everywhere, but you can still save money by shopping at cheaper grocery stores. Places like Aldi, Trader Joe’s and H-E-B keep costs low for their customers by carrying store brands, focusing on local foods, or making you bag your own groceries.

And don’t forget about your local farmers market. But wait, aren’t farmers markets more expensive? Not always! With food transportation costs as high as they are right now, you might actually get a better deal on eggs and local produce than you would at the grocery store. Plus, you’re helping support local farmers.

Cut back on the meat.

Listen, we’re not saying you need to suddenly become a vegetarian. But the price of meat is pretty ridiculous right now. You may not be ready to give up your morning bacon ritual just yet, but try replacing a couple of meals throughout the week with a nice salad, pasta or veggie dish. There are lots of great meatless recipes out there, and you might just find a new favorite.

Freeze your meals.

If you’re worried about food prices continuing to rise, you can stock up on ingredients now and freeze some meals for later. All you need is a day to cook up a couple casseroles and some room in your freezer. Just be sure to make things you won’t mind eating on repeat for a while.

Adjust your food budget.

The best way for you to fight food inflation is with a budget. Because when you’ve made a plan for your money before the month begins, you can shop those grocery store aisles with confidence. Plus, the great thing about a budget is that you can adjust it—and you should!

Because let’s be honest, even after using all of these food-saving tips, you might still end up spending more than you usually would on food. But when you budget with EveryDollar, it’s super easy to track all your food purchases, move some numbers around, and see where you can cut back in other areas. Your budget is there to work for you, not against you.

And listen, food prices may be going up, but you will get through this. All it takes is intentional planning, some focus, a little bit of creativity and, of course, your trusty budget.