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Food Price Inflation Today, Food Insecurity Tomorrow, Hunger The Day After?
Is Hunger Coming To Your Community?
For most of 2021, food price inflation in the US, as measured by the Food subcomponent of the Consumer Price Index, increased more slowly than overall consumer price inflation.
That minor blessing ended this past February. Ever since, food price inflation has been rising faster than overall inflation as measured by the Consumer Price Index.
Inflation is not merely targeting Americans’ paychecks, it is also attacking their grocery budgets. For those at the lower end of the economic strata, just getting enough to eat is becoming an increasingly dicey proposition—today’s food price inflation has a vicious tendency to become tomorrow’s food insecurity.
Tomorrow Is Today
For increasing numbers of people in communities across the United States, that tomorrow is today, as food insecurity is rising seemingly everywhere.
In McClean County, Illinois, 9.2% of the population experienced a measure of food insecurity in 2020, according to the national food bank network Feeding America. This is in spite of more than 25,000 residents receiving federal SNAP (Supplemental Nutrition Assistance Program) benefits by the end of 2020.
The number of SNAP recipients in McLean County has only risen since 2020, and as of this past May stands at 25,977.
Part of the reason for the persistent food insecurity even in the face of nutritional assistance programs has been the pernicious impacts of other forms of inflation—the uptick in gas prices since the beginning of 2021, for example, makes just going to the grocery store an expensive proposition.
And the cost of doing so is only going up. Inflation in the U.S. is at a 40-year high. Gas prices have been surging, with the county average about $4.45 a gallon. Prices for food increased 10.4% over the 12-month period ending in June — the largest increase since February 1981, according to the U.S. Bureau of Labor Statistics.
In Maryland, meanwhile, the Maryland Food Bank is seeing the demand for food bank assistance double and even quadruple.
"We would buy about 12 million pounds of food, which is still a lot, and pay 45 cents per pound," Maryland Food Bank Executive Vice President Meg Kimmel said. "Next year in our budget we have budgeted for 25 million pounds of food, so double the amount at double the cost--88 cents per pound versus 45 cents pre-pandemic level."
The study broke down the state's needs into percentages. Among the findings was the percentage of Maryland families reporting food insecurity has quadrupled over the past several months, rising from 8% in December to 32% last month.
Nor can Illinois and Maryland be viewed as isolated instances. Not only is the Food subcomponent of the Consumer Price Index rising nationally, that rise is largely confirmed by retail metrics firm Datasembly’s Grocery Price Index, which tracks retail prices for grocery stores across the country.
Keep in mind that inflation means people are paying more and buying less. Food price inflation means people are also paying more and eating less. While it is possible to do without some goods when the price becomes too high, everyone needs to eat—because of rising food price inflation, meeting that need is becoming an increasingly difficult challenge. As food price inflation continues to rise, so too will the number for whom meeting that need becomes an impossible challenge.
The Day After Tomorrow: Hunger
Yet as worrisome as food price inflation and its close cousin food insecurity are, in several parts of the world we are seeing what follows. If today’s food price inflation is tomorrow’s food insecurity, then the day after tomorrow is hunger, when people are simply unable to buy sufficient food on which to live.
"We are in a food security crisis in South Africa and we are finding people presenting with malnutrition. In the Eastern Cape, 12 children died of starvation and we will find more incidents like that as the country starts to manifest. We are also seeing opportunistic crime as a result. Our concern is that the July 2021 riots that spiraled out of control and if we do not get inflation under control, if we do no address food security, we will be in a very difficult time as a country," said Andy Du Plessis Food Forward SA Managing Director .
While food price inflation is driving a lot of the crisis, the nation’s deteriorating infrastructure is also part of the problem.
“But on top of global challenges such as rising food prices, fuel price hikes and soaring shipping costs, which are impacting purchase prices, we’re also grappling with unique local challenges such as load shedding, congestion at ports and deteriorating road and rail infrastructure, which are causing major transportation delays.”
Dilapidated rail networks have seen a growing number of companies turn to congested and overburdened roads for freight transportation over the past decade, Hume further said.
Inflation and inadequate food supplies are reaching the point in South Africa where civil unrest becomes a real possibility and an immediate threat.
"It is really shocking how food has gone up. What has made it worse is the Covid-19 pandemic. People lost their jobs during this period. This current economic climate is the reason one of the July unrest in Durban. We need to go back to planting our own food, " expressed Sipho Zungu, a consumer who sells traditional medicine in Johannesburg.
To appreciate the scale of that threat, bear in mind that riots and protests over its bankrupt economy and inability to feed people recently resulted in the collapse of the government of Sri Lanka.
Sri Lankans have taken to the streets for months demanding their leaders resign over an economic crisis that has left the island nation’s 22 million people short of essentials like medicine, food and fuel. After they stormed the presidential palace and other government buildings earlier this month, then-President Gotabaya Rajapaksa, whose family has ruled Sri Lanka for most of the last two decades, fled and resigned.
On the other side of the world, in Panama, similar civil unrest, triggered by a similarly deteriorating economy, is further disrupting food supplies and causing food shortages, exacerbating the already dangerous situation.
The demonstrations have triggered severe food and fuel shortages in some parts of the country, and the business sector says $500 million has been lost.
Food price inflation leading to food insecurity and hunger invariably produces food riots. In several parts of the world, those riots are already happening.
The Future For Europe?
The forces sparking food riots and economic unrest in South Africa, Sri Lanka, and Panama (as well as other nations) are by no means confined to emerging economies. Economic conditions are deteriorating everywhere, with leading industrial nations such as Germany also potentially heading into very dangerous and turbulent times as a result.
Economist Alisdair MacLeod is forecasting a grim future for Germany, with a collapsing euro currency plus the ongoing disruptions brought on by the Russo-Ukranian War as well as the resultant sanctions imposed on Russia being seen as leading to complete economic collapse as soon as this coming winter.
"The euro is sliding.
"Markets can see that all the ECB is doing is talking the talk and otherwise is frozen into inaction.
"The economic consequences have been to put Germany’s economy on life support with its industrial limbs beginning to shut down, along with the productive capacity of many other EU states.
"In the coming months, there will be food shortages exacerbated by lack of fertiliser supplies.
"Then there will be winter without heating fuel and frequent power cuts.
"And winter with food shortages in a continental climate is no joke.
"They will spark riots and growing political instability."
Given the experiences of countries such as Sri Lanka, South Africa, and Panama, should the economic situation in Germany prove as dire as is being forecast, it would take no great leap of imagination to envision levels of civil unrest equal to those nations.
Germany might even be particularly vulnerable to such unrest, given the country’s ingrained national memory of the Weimar hyperinflation of 1923, immortalized by photos and newsreel footage of people literally taking wheelbarrows full of German marks to the store just to buy a loaf of bread. How Germans might respond to a return to that level of economic chaos is almost certainly a frightful speculation—yet an increasingly unavoidable one.
The Future For America?
It requires no great imagination nor detailed economic analysis to comprehend that rising privation leads to rising hunger. Indeed, while Germany has its collective and traumatic memory of the Weimar hyperinflation, the food insecurities of the Great Depression hold similar fascination for America—if the wheelbarrow full of cash is emblematic of the Weimar hyperinflation, the soup line and soup kitchen are equally emblematic of America during the Great Depression.
Photos such as this are a sobering reminder that America has been to the brink of economic disaster before. It can happen here because it has happened here.
Depending on where one stands in the country, either geographically or economically, it arguably is already happening here. Food price inflation and food insecurity are nationwide phenomena, not isolated circumstances. The longer they persist, the more inevitable hunger becomes. Yet conquering food price inflation may not immediately improve food insecurity, and could even make it worse.
The Fed’s planned recession may reduce consumer price inflation, and that theoretically should include food price inflation. However, the cost of that recession will be lost jobs and lost wages. The cost of the recession for some will be the loss of money with which to buy food even if food prices decline. Because of economic recession, reducing food price inflation may still result in a rise in food insecurity in the US.
Make no mistake, recession and job loss are the Fed’s plan for curing inflation. They have said so, explicitly and repeatedly.
We should be greatly concerned, therefore, that there are more than a few warning signs that job losses are already starting to happen, even before food price inflation is overcome.
The bill for the Fed’s fight against inflation may already be coming due before the fight is finished. Like the inflation the Fed seeks to conquer, the price tag for that conquest is high and rising higher.
Food price inflation is very much today’s reality. For many, that reality has progressed to food insecurity. Yet regardless of what steps the Federal Reserve takes to address inflation—and very likely because of them—food insecurity is sure to only increase. Rising prices and falling employment both threaten everyone’s grocery bill, and the Fed’s interest rate trajectory explicitly trades the one for the other. The grocery bill loses either way.
Privation is on the rise in this country. Is hunger set to rise as well?