Under the triple influence of global supply chain disruptions, bad weather and rising energy prices, food prices have soared, placing a heavy burden on poorer people around the world and starting to unsettle societies.
A recent global index released by the United Nations Food and Agriculture Organization (UnitedNationsFoodandAgricultureOrganization) shows that food prices in January have climbed to their highest level since 2011, when soaring food prices triggered political riots in Egypt and Libya.
Since December 2021, the prices of meat, dairy products and grains have been moving higher, and oil prices have touched the highest level since the index was recorded in 1990.
Maurice Obstfeld, a senior fellow at the PetersonInstituteforInternationalEconomics and a former chief economist at the InternationalMonetaryFund ( MauriceObstfeld) said: "Higher food prices will lead people in poorer countries to spend more of their income on food, especially in some countries in Latin America and Africa may spend 50 to 60 percent of their income on food."
He believes that the statement that a global food crisis is looming is "not alarmist. At the same time, the combination of slowing economic growth, high unemployment and budgetary constraints due to the huge sums of money invested by the government in the fight against the new epidemic "has added to the already dire situation.
Before the outbreak, global food prices were already on the rise.
After the outbreak in early 2020, the global demand for food changed dramatically. Restaurants, cafeterias and slaughterhouses have closed their doors and more people are cooking at home. Some U.S. farmers are being forced to dump their milk and slaughter their livestock because they can't get their products to consumers.
International Monetary Fund economist Christian Bergmans (ChristianBogmans) said, "Two years later, global demand for food remains strong, while other supply chain obstacles such as rising fuel prices and transportation costs, truck driver and container shortages continue to push up food prices."
Drought and bad weather in major agricultural countries such as Brazil, Argentina, the U.S., Russia and Ukraine have caused the situation to worsen.
Data from the International Monetary Fund shows that the global average food inflation rate in December 2021 translates into an adult rate of 6.85 percent, the highest level since statistics began in 2014; soybean prices soared 52 percent between April 2020 and December 2021, corn and wheat prices both jumped 80 percent, and coffee prices rose 70 percent. The main reason behind this set of increases is the drought and frosty climate in Brazil.
The impact of rising food prices is being felt across the globe.
The Asian region was largely spared due to sufficient rice production, but some countries in the Middle East and Latin America, which are more dependent on imported food, are in trouble.
According to Bergmans, the depreciation of national currencies against the U.S. dollar further aggravated the burden on countries such as Russia, Brazil, Turkey and Argentina, as most food commodities in international trade are traded using the U.S. dollar. In Africa, severe weather, epidemic restrictions, and conflicts in Congo, Ethiopia, Nigeria, South Sudan and Sudan have disrupted transportation routes and pushed up food prices.
Joseph Siegle, research director at the AfricaCenterforStrategicStudies at NationalDefenseUniversity, estimates that 106 million people on the continent are food insecure, compared to 2018 a doubling.
Gabriela Ramírez, a domestic worker in Mexico City, said, "About half of the monthly spending budget goes to buying food, and right now food prices are straining budgets."
In November 2021, Mexico's inflation rate reached its highest level in more than 20 years, and fell slightly in December. Ramirez said, "This affects me a lot. I don't earn much, my salary increases are small, and sometimes we barely have enough to eat."
Food spending accounts for less than 1/7 of the average U.S. household expenditure, so the impact of rising food prices on the U.S. population has not been as severe. However, inflation has rippled through more areas. U.S. prices have risen to a 40-year high, and everything from energy, used cars, dishwashers, services and rent prices have been affected.
Despite this, U.S. food prices have risen quite dramatically, adding to the burden of the poorest families, who spend a higher percentage of their total spending budget on food. Data from the Bureau of LaborStatistics show that food prices rose 6.3% year-over-year in December 2021, and meat, poultry, fish and egg prices rose 12.5% year-over-year.
The Biden administration has taken a number of steps to limit some of the food price increases, including a crackdown on meat processor consolidation - which the Biden administration believes is one of the causes of the meat price increases.
Recently, the U.S. Department of Agriculture (DepartmentofAgriculture) announced a partnership with the Port of Oakland, California (PortofOakland) to set aside a 25-acre (151 acres) "temporary" container-filling site to speed up the crating of goods for shipment abroad.
Maria Zieba, assistant vice president of international affairs for the National Pork Producers Council, said, "Hog farmers are facing a number of challenges, such as average container shipping prices that are 170 percent higher than a year ago, frequent problems with last-minute cancellations, and shortages of trucks and refrigeration equipment."
Rising fertilizer, crop insurance and chemical costs are also placing a heavy burden on farmers, noted Chris Edgington, president of the National Corn GrowersAssociation and a northern Iowa corn and soybean grower.
