Here's what getting more expensive at the grocery store

CNN/Stylemagazine.com Newswire | 4/13/2022, 11:35 a.m.
Food prices keep going up. In the year ending in March, not adjusted for seasonal swings, food prices rose 8.8% …
Groceries have gotten more expensive over the past year. Mandatory Credit: Anna Moneymaker/Getty Images

Originally Published: 13 APR 22 10:36 ET

By Danielle Wiener-Bronner, CNN Business

(CNN) -- Food prices keep going up.

In the year ending in March, not adjusted for seasonal swings, food prices rose 8.8% — the biggest 12-month increase since the year ended May 1981, the Bureau of Labor Statistics reported Tuesday.

Over the past year, virtually every type of food has become more expensive.

Groceries overall got 10% more expensive. Flour jumped 14.2%, milk rose 13.3%, eggs went up 11.2% and fruits and vegetables went up 8.5%. Bacon increased 18.2%.

A number of factors have tightened food supplies across several categories as demand stayed strong, causing prices to spike across the board.

One problem is environmental. Droughts in Brazil, the United States and Canada impacted crops from coffee to soy to wheat, said William Osnato, senior research analyst at Gro Intelligence, an agricultural data analytics firm.

The war in Ukraine has disrupted the wheat market, sending prices spiking. Plus, supply issues are also impacting the global vegetable oil market. A deadly avian flu is reducing the egg supply and driving wholesale egg prices way up, and threatening consumer prices as well.

It will take a while before prices come back down, Osnato noted.

"We're not about to grow our way out of it with a good US crop," he said. "That's not going to solve anything. We're going to be in a high food price environment for more than a year."

Butter spikes

Not every single food item got pricier last month. But several did.

Many shelf-stable goods saw big jumps from February to March, according to seasonally adjusted data from the BLS. The price of canned vegetables jumped 4.2%, while the dried beans, peas and lentils category went up 4.4%. Rice got 3.2% more expensive, and crackers and bread increased 2.7%.

Fresh staples got more expensive as well. Uncooked ground beef jumped 2.1%. Milk grew 1.3%. Fresh vegetables grew 2.6%.

But the biggest jump? Butter, with a 6% increase.

"The global supply of milk over the past six months or so has contracted in a significant way," said Rob Fox, director of the knowledge exchange division at CoBank, which provides financial services to agribusiness.

In the United States, "the milk production forecast for 2022 is 226.0 billion pounds, 1.2 billion lower than last month's forecast and a projected decrease of 0.3 billion pounds from 2021," according to the USDA's dairy outlook released last month. "This would be the first year-over-year decrease in milk production since 2009."

But why was butter up 6% in March, while milk rose only 1.3%?

Fox explained that when milk supplies get squeezed and demand for milk is up or steady, butter is the first thing to get hit. That's because it's a relatively small part of the dairy market. "It can have significant price volatility," Fox said, noting that spikes in butter prices mean that other dairy goods could get more expensive too.

A few items did become cheaper last month. Doughnut prices fell 1.7%, peanut butter got 1.5% cheaper and ham prices declined 1.2%.