There’s been a steady drumbeat recently from the Biden Administration blaming the meat industry’s structure for the recent rise in prices in the grocery store. Let’s look at the facts according to the federal government’s own data.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in September on a seasonally adjusted basis after rising 0.3 percent in August, the U.S. Bureau of Labor Statistics reported on Wednesday. Over the last 12 months, the all items index increased 5.4 percent before seasonal adjustment.
Gasoline prices rose another 1.2% for the month, bringing the annual increase to 42.1%. Fuel oil shot up 3.9%, for a 42.6% year over year surge. U.S. consumers are now paying an average of $3.29 a gallon for gasoline, the highest level in seven years, according to the U.S. Energy Information Administration.
Unusually high demand is a crucial factor driving higher inflation. Spending jumped at an 11.9% pace in the second quarter as more people received Covid-19 vaccinations, businesses reopened and trillions of dollars in federal aid coursed through the economy, according to The Wall Street Journal. The shortage of workers is also driving up wages, putting pressure on companies to raise prices.
So, where are Americans seeing inflation? Nearly every part of their livelihoods:
Rental cars +43%
Gas 42%
Propane 28%
Used cars 24%
Bacon 19%
Hotels 18%
Beef 18%
Pork 13%
Eggs 13%
TVs 13%
Kids’ shoes 12%
Fresh fish/seafood 11%
Furniture 11%
New cars 9%
Chicken 8%
Apples 8%
Restaurant prices 5%
Electricity 5%
“A 7.6 percent year over year price increase for chicken is barely outpacing inflation and that’s despite the fact that inputs like corn, soybeans, gasoline, packaging and transportation are all up double and triple digits, on top of a labor shortage. It’s Economics 101,” said NCC President Mike Brown. “It’s time for the Biden administration to stop playing chicken with our food system and stop using the meat industry as a scapegoat for rampant inflation across all sectors of the economy.
The biggest input cost in chicken production is feed. According to USDA, corn prices increased from $3.06 per bushel (August 2020) to $6.44 per bushel (August 2021), a 110 percent increase. According to USDA/ERS, 2020 soybean meal per short ton has increased from $290.24 (August 2020) to $358.22 (August 2021). All in all, on a liveweight basis, broiler feed costs have increased 56.1 percent year over year, according to USDA.
“This is all on top of truck driver shortages, backlogs at our ports, shipping delays, and government policies incentivizing people not to work,” Brown added. “This administration should be looking at the chicken industry as a model of success, from farm to table. On the heels of World Food Day, we stand ready to work with all stakeholders, including government and industry, to ensure food security during the pandemic and address the real economic factors that have led to inflation.”
