US Food Prices Could Continue Surging As a Result of Russia-Ukraine War

by Amanda Glover
(Photo by Liu Guanguan/China News Service via Getty Images)

As the Russia-Ukraine war wreaks havoc on Europe, food prices might continue surging. This only makes things more difficult for Americans who live paycheck to paycheck.

At a Glance

  • The Russian oil ban in the U.S. and energy shortage have increased.
  • The shortages of materials put strains on supply, only making prices rise.
  • With wheat as a baker’s main ingredient, the shortage is starting to hurt their business.

As many Americans know, Russian oil is currently banned in the United States and the energy shortage has increased globally. Therefore, experts say grocery store shoppers can expect their grocery bills to rise as the months pass. This is almost certain if Ukraine misses its wheat planting season.

As of February 2022, food prices have increased by nearly 8% for the previous 12 months. This is the largest 12-month increase since 1981.

Supply chain expert and founder of Potomac Core, Dan Varroney, discussed the situation with FOX Business.

“It comes at an absolutely horrible time for American consumers because we’re looking every day at inflation almost reaching 10%,” he 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.”

As Observatory for Economic Complexity readers, Russia and Ukraine produce 25% of the global wheat supply. Not having them in the global market puts a strain on supply and pushes prices even higher.

FOX Business informs readers that all of the new shortages end up affecting the costs of doing business for food manufacturers at home.

“Everything from getting food from the ground to producing it, to storing it, to delivering. It all involves energy,” Varroney continued. “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.”

How Rising Food Prices Affect Those in the Baking Industry

The baking industry certainly isn’t safe either. This sucks for me because it’s an activity that gets me excited about cooking. For bakers, wheat is the main ingredient for their food and natural gas used for large-scale industrial ovens. Therefore, bakers are struggling with the changes in doing business costs. 

The president and CEO of the American Bakers Association, Robb MacKie, discussed the situation with FOX Business.

“A lot of ingredients come out of Ukraine, particularly wheat, oilseeds, barley, and a number of other crops,” said MacKie. “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.”