Jan 8, 2021 - World

Food costs are rising all over the world

Data: UN FAO food price index; Chart: Axios Visuals
Data: UN FAO food price index; Chart: Axios Visuals

Year-end data from the U.S. and around the world show a consistent theme — steadily increasing prices.

Driving the news: The Food and Agriculture Organization’s food price index rose for the seventh straight month in December, rising to its highest in six years.

Where it stands: In most of the world, consumer price index (CPI) and personal consumption expenditure (PCE) readings are being held down by weak employment levels and minimal wage increases as well as the cost of elective purchases like hotel stays, airfares and apparel.

  • However, the cost of things like food and other goods has been creeping higher for most of the year.

By the numbers: The prices paid index for the U.S. services sector jumped to its highest level since early 2012 in November and hovered near that level last month, while the prices paid for the manufacturing sector rose to their highest since 2018 in December.

  • The market has been steadily pricing in higher inflation for months, with 5-, 10- and 30-year breakeven inflation rates breaching their highest levels in two years earlier this week.

What's happening: Supply chains are being disrupted and the pandemic is wreaking havoc on workforces across the globe. Additionally, like gold and most commodities, food supplies largely are priced in dollars, and as the dollar has fallen to its weakest level in more than 2½ years, food prices have risen.

Between the lines: The latest report from the Census Bureau found some 29 million American adults reported that their household sometimes or often didn’t have enough to eat in the last week.

  • That adds up to 14% of all adults in the country, a number that rises to 18% of adults with children, 21% of Latinos and 24% of Black adults.
  • Just 3.4% of adults reported that their household had “not enough to eat” at some point over the full 12 months of 2019.

The last word: “It’s particularly heartbreaking because before COVID hit, we were on a pathway to end childhood hunger and had seen remarkable progress over the last several years, all of which was undone in just a matter of months,” Lisa Davis, SVP of nonprofit Share Our Strength’s No Kid Hungry campaign, said on a call with reporters in December.

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