By Reese Lee | Wealth of Geeks
NikkeiASIA reports that overall commodity prices soared 50%, the fastest increase in the last twenty-seven years. According to the World Bank commodities outlook, food insecurity remains a pressing issue impacting every continent.
The report forecasts some fluctuations in current prices and even some lowering of commodity costs. However, things are not so rosy when it comes to food costs to the consumer.
Global increases in utilities, transport, farming, and manufacturing have been rapidly climbing in the last 10 years. So, while current trends may indicate a downward movement, the exponential increases experienced up to now have substantially driven up the per-person meal cost to never-before-seen levels.
No wonder the cost of a meal has continued to climb globally.
Commodity Prices Impact Staple Dishes
Analysts commonly calculate per-person meal cost increases by studying price fluctuations on individual meals. The ubiquitous Japanese curry is one such benchmark dish. In Japan, curry is a low-cost dish that is easy to prepare, much like ramen.
In their semi-annual update, based on statistics from the Ministry of Internal Affairs and Communications, Teikoku Databank reports the cost for a family curry meal in July rose nearly 800% over last year, reaching a per-serving cost of about $2.40.
Increased utility costs and poor rice harvest returns drive this increase. The cost of carrots, potatoes, and onions is up 20%-50% compared to previous years. Even the price of rice — a traditionally market-controlled commodity — has risen more than 7%. Adding to that, the Japanese Yen has plummeted to an all-time low.
Japanese curry, often containing protein and rice, lands on the nutritional spectrum as an affordable yet nutritious meal. That classification makes Japanese curry a good reference point for how 2024 prices impact the average Japanese consumer.
All in all, the average consumer in Japan is feeling the pinch, especially those least prepared for price jumps.
Americans Also Feeling the Pinch
In the U.S., cost increases are also impacting consumers. The Chicago Tribune reports between 2019 and 2024, the price of McDonald’s fries doubled while the Big Mac jumped from $5.99 to a wallet-depleting $12.99.
These price increases are not exclusive to McDonald’s, either, as Fast Food Menu Prices records similar price jumps across the restaurant sector.
Corporate Greed vs. Commodities Pricing
The cost-per-meal increases don’t just result from rising commodities.
Tom Perkins with The Guardian believes corporate greed is also to blame. The news organization’s analysis of financial documents and earning calls transcripts from 36 top U.S. food corporations reveals dropping costs, while prices – and profits remain higher.
While the consumer continues to pay more and more for basic meals like Japanese curry or ramen dishes, restaurant chains churn out record profits. In the case of the United States, the disparity between meal prices and corporate profit cuts is so profound that it is anticipated to impact upcoming elections.
The Guardian article points out some startling comparisons. While corporate food companies are reporting an average 51% increase in profits since pre-2020 levels, the average worker in the U.S. is earning just 5% more over the same time period.
Like the benchmark curry in Japan, the U.S. studies chicken wing price fluctuations as one way to monitor overall meal costs. And those prices have also jumped from 2020 to the present, as much as 71% for wholesale chicken wings.
Some Good News Ahead
The news for global consumers is not all bad, however. One area in which analysts are anticipating a reduction in food costs for 2024 is the seafood industry. According to Supermarket News, global price drops on shrimps and prawns that have happened in recent years are anticipated to remain, and further price reductions for fish are expected. This may mean consumer shifts in dietary trends, but at least it is one area offering a reprieve from high prices.
Riding the Price Waves
The best option for the consumer seems to be adapting to the higher prices and riding out the price fluctuations. Preparing more meals at home, along with savvy bulk meal preparation, is often cited as the best way to lower per-meal prices.
This article was produced by Media Decision and syndicated by Wealth of Geeks.
