Finance

Soaring food prices worry lawmakers as global hunger rises

Skyrocketing food prices are alarming lawmakers, who worry about the mounting impact on U.S. consumers and rising hunger around the world. 

On Wednesday, the Labor Department reported an annual leap of 9.4 percent in food prices as of April, representing the largest 12-month increase since 1981.

Republicans jumped on the latest inflation data to sharpen their attacks against President Biden, whom they blame for inflation across the consumer spectrum. 

Wednesday’s numbers are “more bad news for workers and local businesses,” Rep. Kevin Brady (R-Texas), the ranking member of the chief tax-writing committee in the House, said in a statement.

“April was another month of raging Bidenflation – punishing price hikes, core inflation worsening and paychecks shrinking. If the President claims inflation has peaked, someone ought to remind him that’s what he claimed last year and was horribly wrong,” he added.  

Democrats, meanwhile, pointed out that inflation is not just a problem for America but is affecting countries the world over.

“Obviously no one likes the rising prices, and this is a global phenomenon,” Sen. Gary Peters (D-Mich.) said in an interview. “We’re seeing inflation just all over the globe, a big impact, of course, of the conflict in Russia, particularly in food with Ukraine not able to export their grain.”

“We’ve got to work on ways to increase food production here in the United States,” he added.

The price of meats, poultry, fish and eggs skyrocketed by 14.3 percent over the last year, the largest annual increase since May 1979. While the price of fruits and vegetables declined in April, falling 0.3 percent from March, they were still up 7.8 percent on the year, the Labor Department said.

Broken down by sector, the index for food prepared at home, which is often more relevant to lower-income households, was up 10.8 percent annually, while the price of restaurant food jumped 7.8 percent.

The spike in food prices is just one component of broader U.S. consumer inflation, as measured by the consumer price index, which was up 8.3 percent on the year, according to the latest report from the Labor Department.

The April numbers are a slight improvement over the numbers for March but still exceeded Wall Street’s expectations of 8.1 percent and further cemented the notion that inflation, at least in the short term, is here to stay.

Globally, the United Nations Food and Agriculture Organization reported last week that food prices have jumped nearly 30 percent since last year.

At a Senate Appropriations Committee hearing Wednesday on global food security and the COVID-19 pandemic, Sen. Chris Coons (D-Del.) said the international community is now facing “one of the worst food crises in the world in decades, certainly in the lifetime of any of us,” with significant domestic implications.

“The collapse of exports of grain and vegetable oil from Ukraine, combined with inflation and higher costs for fertilizer, fuel and transportation have caused commodity prices to skyrocket,” he said, noting that the total number of hungry people worldwide has doubled since 2019 to 273 million.

United Nations World Food Program Director and former South Carolina Gov. David Beasley told the committee that the war in Ukraine “is already causing ‘collateral hunger’ all over the world.”

While economists agree that the root cause of inflation is supply chain disruption as a result of the pandemic, geopolitical conditions across the globe, such as Russia’s invasion and strict lockdowns in China, are entrenching its effects.

In the U.S., lawmakers of both parties have been keen to infuse inflation with a political narrative, with Republicans blaming it on the Biden’s administration’s fiscal stimulus and spending packages, such as the American Rescue Plan, and Democrats linking it with Russian aggression and corporate price gouging.

Sen. Lindsey Graham (R-S.C.) said in an interview that Wednesday’s consumer price index news indicated that inflation is “not transitory.”

“On the supply side, it’s just a complete mess. The American Rescue Plan didn’t work,” he said.

Moderate Republican Sen. Mitt Romney (Utah) said nobody really knows how long the inflation will last, including politicians and economists, but added, “I think it’s here for a while, and it may be here for a long while. We just don’t know.” 

“But I didn’t hear anything from the president yesterday that said he’s got a handle on doing what it takes to stop it. I think he is right in saying that it should be his highest domestic priority, which is appropriate,” he added.

“I think he’s also right in saying that, overwhelmingly, the response is going to have to be led by the Federal Reserve, and the Fed is showing that they’re willing to raise interest rates, and that, after all, is the most effective tool,” he said.

House Financial Services Committee Chairwoman Maxine Waters (D-Calif.) hit a recurring Democratic talking point on inflation, citing corporate profiteering.

“We’re looking at everything from the supply chain to those who may be taking advantage of the situation and gouging,” she said, adding that she’s looking into “what we can do with that.”

Sen. Richard Blumenthal (D-Conn.) said, “Inflation is a serious issue. The cost of living has been rising and the minor dip that we’ve seen most recently, hopefully it will be the beginning of a trend.”

High prices for food have not gone unnoticed by U.S. food retailers.

“Retail food prices have risen due to a variety of factors, including higher fuel and transportation costs, greater demand for food eaten at home, and other supply chain pressures,” Jim Dudlicek, a spokesman for the National Grocers Association trade group, said in a statement.

“Grocers are working with their suppliers to mitigate price increases to the best of their ability and keep prices as steady as possible,” he added.

Heather Garlich, a vice president with the grocery store trade association FMI, echoed these sentiments. “Grocers empathize with shoppers who are confronted with increased prices and occasional out-of-stocks at the grocery store,” she said.

Tags Biden Chris Coons Chris Coons Food prices Gary Peters Gary Peters inflation Kevin Brady Kevin Brady Lindsay Graham Lindsey Graham Maxine Waters Mitt Romney Mitt Romney Richard Blumenthal

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