Since 2022 is almost in the history books, let’s look ahead a little bit on what consumers may expect with the cost of groceries in 2023. The USDA is predicting that all food prices will increase between 3.5% and 4.5%, up from 3.0% to 4.0% in November, with food-at-home prices rising between 3.0% and 4.0% and food -away-from-home climbing between 4.0% and 5.0%. USDA is also predicting that prices will rise in several food categories. For example, the ongoing highly pathogenic avian influenza outbreak will continue to affect egg prices with increases of 4% to 5% in the near term. Fruits and vegetable prices are expected to be up 1% to 2%, with USDA noting that “elevated prices for wholesale fresh vegetables are expected to place upward pressure on retail prices in the coming months.” The agency is also predicting that vegetable oil prices will increase 5% to 6%.
Some of these price increases are being caused by both weather events such as hurricanes in Florida and drought in the California and war in Ukraine, which is affecting food prices on a global scale. While we hear quite a bit of news about how war is affecting urban areas in Ukraine, we hear less about the impacts that the war is having on farmers. Reports indicate that before the Russian troops withdrew from the occupied territories, they looted most farms and enterprises. What they couldn’t steal, they destroyed. Many agricultural producers complain about the low prices, which are often lower than the cost of production mainly due to the shutdown of most Ukrainian seaports and the increase in logistical costs for inputs. There are reports that Russian invaders stole about 6 million tons of grain from the occupied territories, and that 15% of livestock farms and 10% of cows were destroyed. Almost 20% of the cattle were concentrated in territories currently occupied or where active hostilities are taking place. Between mid-October to mid-November, the average price of live pigs dropped about 20%, due to the shutdown of slaughter facilities in occupied areas. According to the Ministry of Agriculture, one third of the corn crop still remains unharvested in fields.
An article, “China and the World’s Increasing Need for Cropland” by Carl Zulauf, at Farm Doc Daily, Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign caught my attention recently. Zulauf contends that increases in crop yields haven’t kept pace with China’s increasing consumption of feed grains and oilseeds, which is pushing China to find more land. Based on historical time trends, China now needs roughly 8 million more acres per year to satisfy its growing consumption of feed grains, oilseeds, and food grains, which also has implications for the rest of the world, that also needs roughly 8 million more acres per year to satisfy the growing consumption of those grain crops. This article can be found at the following link: https://farmdocdaily.illinois.edu/2022/12/china-and-the-worlds-increasing-need-for-cropland.html
Benjamin Franklin wrote, “Be at war with your vices, at peace with your neighbors, and let every new year find you a better man.”
