Rising food prices due to Russia's invasion of Ukraine

The invasion exacerbated existing supply chain issues that began during the COVID-19 pandemic, as countries struggled to maintain food production and distribution. For instance, feed costs for raising hogs rose by 24% between 2021 and 2022, forcing major pork processors like JBS to increase prices to cover these rising expenses. As a result, U.S. bacon prices peaked at $7.60 a pound in October 2022, reflecting a 30% increase from 2019 levels. Although prices have fluctuated since then, the combination of geopolitical tensions and economic factors has kept food prices elevated, impacting consumers across the nation.

Factors Contributing to Rising Food Prices

• Feed Costs: The war in Ukraine led to a spike in the prices of key agricultural commodities, primarily wheat and corn, which are essential for livestock feed. This increase directly impacts the cost of raising hogs.

• Supply Chain Disruptions: The pandemic initially disrupted meat processing and distribution, leading to shortages and subsequent price increases. These issues were compounded by the ongoing conflict in Ukraine, which further strained global supply chains.

• Inflationary Pressures: General inflation trends that began in 2021, alongside specific impacts from the war, have kept food prices high even as some inflation metrics have started to decline.

Economic Implications

The rising cost of bacon and other food products has become a focal point in political discourse, with various stakeholders attributing blame to different causes, including corporate pricing strategies and government policies. For example, discussions around price gouging and corporate profits have emerged, particularly as consumers express frustration over high grocery bills. The situation illustrates the complex interplay between international events, domestic economic policies, and consumer experiences.