Rising food prices are casting a shadow over the holiday season. According to the Consumer Price Index (CPI) released this week by the U.S. Bureau of Labor Statistics, grocery prices increased by 0.4% in November. This increase, however, pales in comparison to the substantial year-over-year increases in certain food items. Eggs, for instance, saw an 8.2% jump in November alone and a staggering 37.5% increase over the past year. This surge presents significant challenges for consumers relying on eggs as a relatively affordable protein source, as well as for families preparing traditional holiday dishes.
While the rate of food price increases has slowed somewhat compared to previous years, prices remain more than 20% higher than pre-pandemic levels, according to David Ortega, a food economist at Michigan State University. Ortega noted the impact of these rising costs on voters, stating, “It was a key issue in the election in terms of people really feeling that sticker shock at the grocery store.” President-elect Donald Trump, who had vowed to lower prices during his campaign, acknowledged the difficulty of reversing these increases in a recent interview with TIME, stating, “It’s hard to bring things down once they’re up.”
Ortega attributed the increase in grocery prices, specifically “food at home” prices, to several factors. The rise in egg prices is linked to avian flu and increased holiday demand, while the increase in beef prices stems from reduced supply due to drought, high feed costs, and decisions made by beef producers several years ago. The current beef cattle inventory is the smallest since 1951, significantly impacting the price of holiday roasts.
The CPI report presented a mixed picture for holiday shoppers. While flour, prepared flour mixes, and bread saw price decreases (1% and 1.3% respectively), sugar and sweets rose by 0.2%, and butter increased by 1.5%. Oranges and tangerines, popular stocking stuffers, experienced a 1.8% price drop. The gap between inflation rates for eating at home versus eating out has also narrowed, according to Supermarket News, reaching its tightest point since May 2023.
Rakeen Mabud, chief economist at the Groundwork Collective, highlights the concentrated nature of the food industry as a significant driver of price increases. A small number of seed producers, meatpackers, and grocers control a large share of the market, disproportionately impacting lower-income consumers. She argues that this consolidation allows companies to coordinate price increases, leveraging events like inflation and supply chain disruptions to inflate prices beyond what’s justified by input costs. The holiday season, she notes, provides ample opportunity for such price hikes on less frequently purchased items.
Looking ahead, economists are closely monitoring the potential impact of the incoming administration’s policies on food prices. Trump’s proposed tariffs on major trading partners could significantly increase the cost of imported goods, including fruits and coffee. Furthermore, his planned mass deportation of immigrants could disrupt the agricultural labor supply, leading to higher wages and ultimately, higher food prices. Mabud expresses concern that companies might exploit these policy changes to justify price increases beyond the actual financial impact.
Patricia “Pogo” Overmeyer, a 65-year-old lawyer in Arizona, exemplifies the challenges faced by consumers. She has always practiced frugality but has had to become even more resourceful in response to rising inflation, incorporating more meatless meals and stocking up on holiday staples throughout the year. She acknowledges the uncertainty about future grocery costs, especially once she retires.
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