Rising food prices have wide-ranging impacts in First State
Gov. John Carney’s COVID pandemic emergency order officially lifts Tuesday, but even as COVID restrictions disappear there are lingering effects from the pandemic we are coping with this summer
And one of those is higher food prices.
Contributor Eileen Dallabrida takes a look what we are paying more for and why.
Consumers are shelling out more for crab, beefing about the price of steak, and waking up to a more expensive cup of coffee.
Food prices, pressed upward by glitches in the supply chain caused by COVID-19, continue to increase even as the pandemic subsides. In the U.S., prices on fruits and vegetables were up 3.3% in April alone, according to government statistics. Globally, the cost of food has risen 40% in the past year.
At Sansone’s Seafood Market in Wilmington, the stock of live crabs ran out midway through the Independence Day holiday weekend, despite sharply higher prices. The tab for a pound of Maryland jumbo lump crabmeat has soared to $50. Live crabs are selling for as much as $65 a dozen.
“In all my years, I have never seen anything like these crazy prices,” says owner Jimmy Sansone, who doesn’t expect any reductions in cost until at least Labor Day.
Sansone has been selling seafood since 1980 at his shop in Little Italy. Even before the summer crunch, he was ordering crabs from Louisiana to keep up with demand. Customers who chanced by the market as a shipment was delivered took selfies with the crabs and posted them on their Facebook page, sharing news of their good fortune with friends.
These days, Sansone is buying Maryland crabs. He is paying record prices amid a double shortage. First, Maryland is experiencing the scantiest crab harvest in years. On top of that, there’s a labor shortage, a lack of pickers to process crabs.
Pasteurized crabmeat from Asia is typically a less pricy alternative and a favorite with restaurants. But even that is hard to come by.
“We can’t get it in and when we do it’s super expensive, although it’s a little cheaper than Maryland,” he says.
Sansone says shortages are rippling through the seafood industry, impacting prices on king crab legs, snow crabs, and Dungeness crabs. He’s casting a wider net to find lobsters, which are in scarce supply due to labor shortages in bait catching, boat crews, and lobster picking.
“I was taking to my guy in Maine, who was waiting to hear from a guy in Canada,” he says.
So why are food prices rising? It’s a complex stew, with multiple ingredients.
First, blame the weather. About one-fourth of the nation’s food is grown in California, which is sweltering through a protracted drought. That’s contributing to higher prices on grocery shelves, especially almonds, avocados, grapes, lettuce, and milk. In Brazil, the worst drought in 100 years is filtering into the cost of coffee beans.
Food also is more expensive to transport. Ocean freight rates have doubled in the last 12 months, pressing up prices of imported foods. Higher gasoline prices are driving up the cost of trucking food to warehouses and stores. A shortage of truck drivers is giving prices another nudge.
Feed prices for hogs, cattle and poultry are soaring, contributing to global increases in food costs. Between May 2020 and May 2021, soybean prices increased by more than 86%; corn leapt 111%, according to economists at the International Monetary Fund, a Washington D.C.-based financial institution representing 190 countries. In Argentina, where eating beef is a national pastime, the price of short ribs is up 90%.
At Haldas Market in North Wilmington, sirloin steaks are priced at $15.99 a pound, up from $9.99. John Eleutheriou, owner of the market, says prices to the customer reflect only a portion of the increase in costs to grocers.
“For me, sirloin has pretty much doubled. Tenderloin, too,” he says. “I can only raise prices so much. Then I have to bite the bullet because people will only pay so much.”
Concerned that they might price themselves out of the market, grocers are tightening profit margins on beef throughout the food industry, according to a survey by NielsenIQ, a provider of shopping data. While wholesale prices on beef have risen 40-50%, the typical consumer is paying only 5% more for ground beef and 9% more for steaks compared to a year ago.
To try to hold the line on prices, supermarket chains are stockpiling staples, including nonperishables and frozen meats. Meanwhile, consumers haven’t given up their pandemic shopping habits, keeping pantries and freezers full. U.S. grocery sales for the week ended June 19 were 15% above the same pre-pandemic week two years ago, according to NielsenIQ data.
"In all my years, I have never seen anything like these crazy prices." - Sansone's Seafood Market owner Jimmy Sansone
Associated Wholesale Grocers Inc., a wholesaler for more than 3,000 grocery stores, recently purchased 15% to 20% more inventory, mainly packaged foods with longer shelf life, says CEO David Smith.
Michele Hart-Henry is stockpiling, too, filling the freezer at her home in North Wilmington. She has researched prices at multiple markets in New Castle County, creating a spreadsheet to identify the best deals. Recently, she loaded up on bacon.
These days, she finds bargains are harder to come by, especially for meat eaters. Last week, she turned to the freezer section, neatly marked “Beef,” to retrieve steaks for the grill.
“They were the last two steaks in the freezer,” she says. “What will it cost me to refill it?”
Eating and dining establishments are responding to higher prices and shortages by tweaking their menus, marking up the tab on such familiar standbys as chicken wings and burgers. Mrs. Robino’s, an Italian restaurant in Wilmington, suspended its Thursday crab night special. DuPont Country Club has taken crab cakes off the menu indefinitely. In Dewey Beach, Woody’s Bar and Grill has put its crab cake shipping program on hold.
At Harry’s Savoy Grill in North Wilmington, the price on the restaurant’s signature prime rib has inched up to $39.95 for a 12-ounce cut. Owner Xavier Teixido says the supply chain has yet to keep up with the speed with which the country reopened after COVID vaccines were rolled out. In addition to food shortages, restaurants also are scrambling to secure supplies ranging from martini glasses to cleaning cloths.
“Consumer demand is high and people are out in droves. But as far as products go, the supply chain couldn’t handle it,” he says.
Teixido expects shortages to last at least until the end of the year. Until then, he is in the position of paying up to $40 a pound for filet mignon and splitting the increased cost with patrons.
“We can’t sell what we don’t have,” he says. “It’s up to us to secure the proteins and give our guests a great experience.”