If you’ve taken a trip to the grocery store recently, you may have been met with quite the shock upon seeing the bill. “What on earth just cost me $100?!” is what you may have been thinking (and we don’t blame ya).
Everyday items have become very expensive over the past several months due, in part, to inflation, though other factors have also impacted food supplies and prices. We’ve seen smaller crop numbers in Florida’s citrus industry lead to predictions of increasing orange juice costs, and supply chain issues impact everything from chicken tenders to cream cheese. But those painful grocery bills could get a little bit better soon.
According to AP News, the price of several commodities (raw materials or primary agricultural products) that make up much of the world’s food supply fell over the summer.
Specifically, wheat prices have gone down about 40%, and corn prices have gone down about 25% compared to prices this spring. AP notes that this should be a “welcome signal” for those dealing with high grocery bills.
Tom Martin, a senior portfolio manager at Globalt Investments said, “It should help, it’s just a question of how long that is sustainable…As we slow down, and the economy seems generally to be slower, you get less inflationary pressures.”
As AP noted, recent increasing food and energy prices largely “fueled the hottest inflation” seen in decades. Combined with steady demand, constricted supplies, and Russia’s invasion of Ukraine (and the impact it had on production and exports), things were looking very expensive this year.
But some prices are starting to fall. Ukraine and Russia have made a deal about grain exports which could ease supply concerns. This could have a significant impact since Ukraine exports about 10% of the world’s wheat and corn. There has also been a forecast of higher wheat production from the U.S. Department of Agriculture.
Lower prices of some commodities can help food producers. As AP points out, these producers have had to deal with higher costs of commodities used to make basic things like cereal or packaged food items.
Lower prices for commodities can also help those invested in food production companies. Companies like Mondelez (which owns brands like Cadbury, Chips Ahoy!, and Oreo) have seen their profit margins fall. But slowing inflation could lift profits.
When it comes to interest rates, those have recently been raised in an attempt to combat inflation. The U.S. Federal government has indicated that it intends to keep raising interest rates until it’s more sure that inflation is cooling off. But, according to AP, “Wall Street is hoping that a sustained drop in commodity prices, from energy to food, will result in inflation peaking and starting to cool.”
We’ve been taking a look at inflation numbers for months, to see how those could impact your Disney World trips. As CNBC points out, the prices that consumers pay for different goods and services rose 8.5% in July of 2022 compared to July of 2021. But that actually marked a slower pace than the month before, largely due to declining gas prices.
When looking at things on a monthly basis, the consumer price index was actually flat. Though energy prices and gas fell, that was offset by a gain in food prices and shelter prices. When it comes to food prices, as of the most recent updates, butter was up more than 20% compared to last year, eggs were up more than 35%, and coffee was up more than 20%.
But some were encouraged by the most recent inflation levels report. Aneta Markowska, chief economist at Jefferies said, “Things are moving in the right direction…This is the most encouraging report we’ve had in quite some time.”
If food commodity prices continue to lower and inflation cools down, prices could change for a variety of items. But, of course, the situation is developing and things could change.
For now, be sure to take a look at all prices carefully when budgeting — whether that’s for the grocery store or Disney World. Price increases have hit a lot of places, and the Most Magical Place on Earth is no exception. And more price increases could be on the way, according to Disney CEO Bob Chapek.
For budget help, click here to see a realistic budget for the 2022 EPCOT Food & Wine Festival, or click here to see how much it costs to do Disney World at Halloween in 2022. You can also click here to learn the TRUTH about Disney food prices, or click here to see the average cost to fly to Disney World in September of 2022. All of those posts are designed to help you get a feel for average costs so you can appropriately budget for your upcoming trips.
We’ll continue to look for more updates on the situation and let you know what we find.
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Have you noticed a big change in your grocery bills recently? Tell us your cost-saving tips in the comments.
The post Why Your Next Grocery Bill Might Not Be As Painful first appeared on the disney food blog.