As Russia continues to wage war on Ukraine, Americans are finding it difficult to keep up with rising prices at the grocery store. As a result, Americans will have to deal with rising gas prices while their shopping bills continue to grow.
“It comes at an absolutely horrible time for American consumers because we’re looking every day at inflation almost reaching 10%,” Dan Varroney, a supply chain expert and founder of Potomac Core, said. “Last month’s figures were close to 8%. And that means that consumers, including those that are living paycheck to paycheck, are going to pay more for food.”
The cost of doing business for food makers in the United States will be impacted by a wide range of resources in limited supply, ranging from natural gas and crude oil to wheat and seed oil.
“Everything from getting food from the ground to producing it, to storing it, to delivering, it all involves energy,” Varroney said. “Natural gas is utilized to manufacture those foods. Then when you get past that? And you get into logistics, you’ve got a store, these food products, so there’s gasoline to ship and there’s electricity to store.”
“It’s energy costs that are going to choke consumers at every level as food companies need to stay competitive.”
“A lot of ingredients come out of Ukraine, particularly wheat, oilseeds, barley and a number of other crops,” MacKie said. “The challenge is that that [region] is one of the top three wheat-growing areas of the world. And if we’re taking that out of production, which it looks like if the conflict goes much longer, that is going to happen. That’s going to have a significant impact on the price of U.S. and Canadian wheat, which is what U.S. bakers primarily use.”
