The price of staying warm this winter

Transcript

NIALA: Good morning! Welcome to Axios Today!

It’s Wednesday, October 19th.

I’m Niala Boodhoo.

Here’s what you need to know today: Americans are buying – and wasting – less food.

But first, preparing for an expensive winter in the U.S. – and a brutal one in Ukraine. The price of staying warm – that’s today’s one Big Thing.

NIALA: You can expect higher heating bills this winter than last. Nearly half of American households use natural gas to heat their homes. And this winter, the Energy Information Administration says the average bill will be $931, that's almost a 30% increase from last year. The likely spike has to do with Russia's war in Ukraine and Axios’ Markets Correspondent Matt Phillips is here to explain more. Hey Matt!

MATT PHILLIPS: Hey. How are you?

NIALA: Matt, so natural gas prices have gone down recently, so why are we still expecting to have such an expensive winter heating our homes?

MATT: Well, they've gone down recently, but over this year they're still up almost 60% and that's largely because the world's largest natural gas producer, Russia, has effectively been cut outta the global economy as a result of its invasion of Ukraine. So that's pushed global prices up. It's drawn a lot of US natural gas to Europe in the form of liquified natural gas. So while we don't get a lot of natural gas directly from Russia, hardly any, it's this global impact on the global market that is in effect raising American heating bills too.

NIALA: So how is Washington and the Biden administration planning to handle this? A 30% increase is fairly significant for a lot of people, especially when we think about inflation and all the other price pressures people are facing.

MATT: Well, we've seen this kind of full court press to try to get large global producers to boost production that's had sort of mixed results. I mean, the president went to Saudi Arabia earlier this year and made that famous fist bump with the leader of the Saudis. But we also just recently saw OPEC say they're gonna cut production because they see a sharp turn down in global demand coming. So it's very difficult to see how the government is really actively engaging with this. I mean, of course, we have a different system than the Saudis, where it's essentially a state controlled industry, the king, or you know, the oil ministers there can decide whether to raise or lower production unilaterally.

We have a market system in the US where we've got hundreds of different companies that make decisions about their own profit maximization strategies. And that's how we produce oil here. And a lot of those producers are sitting on their hands essentially saying, we're fine with high prices here. You know, we're gonna slowly boost production but not enough to bring down some of these surging costs.

NIALA: What can people do to think about offsetting these higher heating costs, both in the short and long term?

MATT: Well, you know, there's always good old fashioned insulating your windows, buying those little plastic packets that are so frustrating to use, and putting them up on your windows, making sure you have decent storm doors and storm windows. Longer term, I mean, there are a lot of new technologies where there's government programs subsidizing, sort of use of heat pumps, geothermal energy that can kind of defray some of the costs. But people are thinking about other things, you know, I've written about my own consideration of maybe I should buy one of those wood burning stoves. Cause I live in kind of a woodsy area where I've got a lot of trees. A lot of people kind of mix and match to try to make their energy consumption bill a little bit less painful.

NIALA: Axios’ Markets Correspondent Matt Phillips joining us from outside New York City. Thank you.

MATT: Thank you.

NIALA: And in Ukraine, heating is on the minds of residents too as Russia ramps up its attacks on Ukrainian energy systems – and the country braces for a brutal winter ahead. Ukrainian president Volodymyr Zelensy tweeted yesterday quote: “Since Oct 10th, 30% of Ukraine’s power stations have been destroyed, causing massive blackouts across the country.” Temperatures in the country are dropping - to below zero in some places overnight, and many people are having trouble keeping warm, living without power or in buildings that have been damaged in shelling and are open to the elements.

In a moment, we’re back with how spiking grocery prices are affecting the food waste crisis in America.

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Americans are buying – and therefore wasting – less food

NIALA: Welcome back to Axios Today, I'm Niala Boodhoo.

We were just talking about the cost of energy going up this winter. Well, food prices are still soaring they're up 13% from last year, and Americans are buying less and less at the grocery store. That's according to a new survey from research firm Morning Consult. 24% of those surveyed said they purchased fewer items to save on their grocery bill. That's up from 15% last year, and it's a stark contrast to the pantry loading we saw at the beginning of the pandemic. That got me thinking about food waste and whether this affects the enormous amount US consumers waste every year. Kate Astashkina is a professor at the University of Michigan's Ross School of Business who studies food waste and sustainable operations management. Hi Kate. Thank you for joining us.

KATE ASTASHKINA: Hi Niala, thanks so much.

NIALA: How do you think people are changing the way they're approaching their food shopping now?

KATE: I would say, whatever the typical US consumer now looks like, a typical consumer from a developing country. So in a developing country, whenever a person goes shopping, a person is searching for a cheaper alternative, searches for the best deal, the best price with every single shopping run, where the needs pretty much outweigh the wants. Would they be buying a cake? Probably only for a special occasion. Would they be buying a special cut of meat? Probably only the richest of the richest there.

NIALA: How much food do Americans waste every year?

KATE: So an average, typical, American consumer would waste, in between 25 to 40% of their basket, which is, which is humongous, right? And I think, the why behind that is, is just because we have so much.

NIALA: So if we're focusing more on needs versus wants when it comes to food, does that mean that there is less food waste?

KATE: Absolutely, the rising prices actually have finally woken up many consumers. Think of when it comes to fridge inventory planning and cooking habits that, virtually you can reach zero waste at a household. It's just a matter of how much effort you put in. And the good thing is that the consumers have now woken up, about the fact that, okay, now if I were to waste this tomato, it's gonna cost me, you know, $1 or $2.

NIALA: Are there alternatives to traditional supermarket shopping that can be more economical and less wasteful, like meal kits?

KATE: So if you are a really busy type of person who does not really have time to go to the store frequently, who does not have time to plan, then you are gonna be better off by buying groceries online. That will be associated with the smaller basket size that you would be getting every time you shop, but it's gonna save up your time, and it's gonna be more convenient for you, so you're gonna be prompted to do it more frequently, and as a result, your food base will go down.

Now meal kits are a terrific alternative at the moment. Still quite expensive, so again, probably only households who have high enough income can afford that alternative, but meal kits would only use the, you know, the amount of ingredients for a serving size of a meal and there will be no leftovers. There is complaints that they have a lot of packaging. Well, the good news is that, like, there has been one study, which showed that the reduction of food waste actually outweighs the rise in the packaging. So overall it's a good thing.

NIALA: That’s University of Michigan Ross School of Business Professor Kate Astashkina. Thanks for joining us

KATE: Thanks so much, Niala.

NIALA: And we wanna hear how you manage food shopping in this economy, and whether you think about keeping down your food waste, send me a voice memo at (202) 918-4893.

One final headline for you today: a new study out in the journal Cell yesterday confirmed what those of us who get eaten alive by mosquitos already know: our bodies smell better to them.

Researchers at New York’s Rockefeller University found that people who have higher levels of certain acids on their skin are 100 times more attractive to the female Aedes Aegypti.

That’s the mosquito type responsible for spreading dengue, yellow fever and Zika - just a few of the mosquito-borne diseases that affect more than 700 million people each year.

That’s it for us today! I’m Niala Boodhoo - thanks for listening - stay safe and we’ll see you back here tomorrow morning.

NIALA: Kai Wright grew up in the Black church. And his favorite part was the hugs, the winks, the check-ins with people. Join him to gather, process, and figure out where this country is going, together. Find Notes From America wherever you get podcasts.