While that’s definitely a factor in global food trends, I don’t see that impacting the US price of food as drastically as companies thinking they can get away with raising prices.
My reasoning is the web of tarrifs and subsidies that the US uses to stabilize domestic markets, prop up farmers, and generally ensure the US is the key grain player. Shortly after the war started the US and Canada also saw a better than average harvest of the grains that Ukraine typically exports.
The domestic prices paid for wheat and flour both started to fall shortly after the Ukraine invasion, while food prices maintained a rocketing trajectory without much if any changes, with only a slight decrease in the rate of increase about a year after.
While protectionist US food policies are chock full of horrible problems, in this case they should have insulated people from radical changes in the availability and price of wheat.
That consumer prices have risen despite falling costs paid to producers is a big indicator that the cost increases are due to something else in the US.
None of this applies to countries that are dependent on grain imports who have to rely on the global markets instead of adjusting export profitability to stabilize things.
While that’s definitely a factor in global food trends, I don’t see that impacting the US price of food as drastically as companies thinking they can get away with raising prices.
My reasoning is the web of tarrifs and subsidies that the US uses to stabilize domestic markets, prop up farmers, and generally ensure the US is the key grain player. Shortly after the war started the US and Canada also saw a better than average harvest of the grains that Ukraine typically exports.
https://fred.stlouisfed.org/series/WPU02120301 https://fred.stlouisfed.org/series/PCU3112113112111 https://fred.stlouisfed.org/series/CPIUFDSL
The domestic prices paid for wheat and flour both started to fall shortly after the Ukraine invasion, while food prices maintained a rocketing trajectory without much if any changes, with only a slight decrease in the rate of increase about a year after.
While protectionist US food policies are chock full of horrible problems, in this case they should have insulated people from radical changes in the availability and price of wheat.
That consumer prices have risen despite falling costs paid to producers is a big indicator that the cost increases are due to something else in the US.
None of this applies to countries that are dependent on grain imports who have to rely on the global markets instead of adjusting export profitability to stabilize things.