Soaring Cost of Food Is Forcing Families to Scrimp at the Dinner Table

(Bloomberg Businessweek) -- Whether at supermarkets, corner stores, or open-air markets, prices for food have been surging in much of the world, forcing families to make tough decisions about their diets. Meat is often the first to go, ceding space to less expensive proteins such as dairy, eggs, or beans. In some households, a glass of milk has become a luxury reserved only for children; fresh fruit, once deemed a necessity, is now a treat..Food prices in July were up 31% from the same month last year, according to an index compiled by the United Nations’ Food and Agriculture Organization. A portion of the rise is transitory, fueled by supply chain disruption and extreme weather. Although some of the bottlenecks caused by the pandemic show signs of abating, structural factors such as climate change and China’s strong appetite for imports will likely endure..Central banks often disregard food and fuel inflation when setting policy because they’re the most volatile categories in the typical basket of consumer goods and services. “However, when ordinary people think about inflation, they don’t want to exclude food and fuels,” says Shang-Jin Wei, a professor of finance and economics at Columbia Business School. Given the rise in inflation that average consumers are experiencing, “I’m predicting we are underestimating the chance that central banks will take more drastic measures than central banks themselves are predicting.”.The sustained increase in prices for basic staples is making some governments nervous. Russia, one of the world’s top grain exporters, began taxing wheat exports in February to stem rising prices at home, while Argentina in May temporarily banned beef sales abroad for the same reason. The surge has stirred memories of 2008 and 2011, respectively, when spikes triggered food riots in more than 30 nations across Africa, Asia, and the Middle East and contributed to political uprisings in the Arab Spring. “Food fundamentally touches all of us,” says Cullen Hendrix, nonresident senior fellow at the Peterson Institute for International Economics, a Washington-based think tank. “Everybody knows about the price of food and knows when it’s increasing, regardless of whether or not they have any interest in politics.” But for most households, relief is scant..Here are the stories of four families—in Nigeria, Brazil, India, and the U.S.—spotlighting the kinds of trade-offs middle- and working-class households are having to make to feed themselves..Lagos, Nigeria: Two Incomes, and Still Not Enough Food.Nafisat Ekerin and her husband have been arguing more in recent months. He thinks she spends too much money on food. “I tell my husband that the money he gives me is not sufficient and I still have to top it up, but he thinks I don’t manage it well enough,” says the local fashion designer from behind the wheel of her manual sewing machine. “Everything goes into feeding.” On visits to the market, the 36-year-old mother of three implores vendors to cut her a deal—something she wasn’t in the habit of doing before Covid-19. “I usually have to plead, saying, ‘Just please sell it to me. I don’t have so much money on me.’ I get lucky sometimes, and sometimes I don’t.”.When the price of a 4-kilogram bag of the brown beans Ekerin used to serve twice a week soared to 2,800 naira ($6.80), almost triple what they cost in December, she removed them from the menu, adding to the list of compromises she’s been forced to make to compensate for food inflation: fewer eggs, watered-down hot chocolate, smaller portions, and no more fresh fruit for her 8‑month-old baby..Food prices are surging in Nigeria for a host of reasons: supply chain disruption caused by the pandemic; restrictions on foreign exchange to pay for imports including rice, wheat, and fertilizer; currency weakness; and violence in key agricultural areas, which is driving some farmers off the land..Ekerin’s weekly grocery bill averages 20,000 naira, up from 12,000 this time last year. In busy times the designer earns just enough to cover food expenses, but nothing extra. Her husband’s salary from a civil engineering job, which swings from about 50,000 to 200,000 naira monthly, pays for the rent, the children’s school fees, and other essentials. She estimates 60% of her weekly budget goes toward food. Still, she considers herself luckier than many others..Almost half of Nigerian households surveyed by the National Bureau of Statistics during the pandemic reported running out of food during the last 30 days because of lack of money or other resources, nearly double the rates before the virus, according to a July report co‑authored by Human Rights Watch and Justice & Empowerment Initiatives. That seems destined to grow: The World Bank expects the number of Nigerians living in poverty to climb to 45.2% next year, from 40.1% in 2019..For Ekerin, the Muslim Eid al-Adha celebration in July was the most painful reminder of rising costs. She wanted to buy a ram to slaughter, as is tradition, but the 85,000-naira price tag was well above the 55,000 naira she spent on an animal last year for her baby’s naming ceremony. And this year’s ram was smaller. She ended up buying it but was forced to pare down the rest of the menu, and there were no leftovers to eat for days, as is the norm. “We didn’t have enough to share with people. That alone is killing me,” she says. “It was just negatively different in every sense.” —Tope Alake.Guarulhos, Brazil: Expiration Dates Are Just a Suggestion.Even Izabel Francisca Teixeira Valdeci is impressed by her own ingenuity. She’s managed to keep food on the table despite soaring local prices. It just took turning grocery shopping into a second full-time job..To find the best deals, several times a week she visits an open-air market and as many as three supermarkets within a 15-minute walk of her home in the outskirts of Guarulhos, bordering São Paulo. She diligently collects each week’s supermarket flyers to compare special offers, and she’ll go out of her way for a discount that helps keep her budget in check. “Sometimes I see onions are on sale. I go there just to buy this one item,” says the 60-year-old civil servant, who lives with two of her three adult children. At least a quarter of her budget goes to food..Brazil is one of the world’s largest producers of agricultural commodities, and ships crowd its ports to load grains, oilseeds, coffee, and meat. Much of the cargo is bound for China, where growing numbers of middle-class consumers are developing appetites for imported luxuries such as red meat. Meanwhile, food in Brazil is getting more expensive. Beef prices in July were up 43% from a year earlier, while chicken prices were up more than 20%, according to the Brazilian Institute of Geography and Statistics. Per capita domestic consumption of beef has fallen to its lowest level since 1996..Among the factors fueling food-price inflation in the country is a weak local currency, which has spurred demand for exports while making imports more expensive. Then there’s extreme weather: This year, Brazil endured its worst drought in almost a century and a devastating freak frost, both of which curbed production of coffee, corn, sugar, orange juice, and vegetables..The scant rainfall has also sent the price of electricity soaring in a nation that relies overwhelmingly on hydropower. The combination of rising energy and food prices caused annual inflation to accelerate to almost 9% in July, complicating life for Brazil’s central bank, which has raised benchmark interest rates four times in 2021. The squeeze could also affect President Jair Bolsonaro’s chances of securing reelection next year..Valdeci’s adult daughter, who’s in charge of most of the family’s cooking, misses preparing some of her favorite recipes, including bife à rolê, in which carrots and bacon are rolled tightly in a strip of beef. “We haven’t prepared this dish for a long time,” Valdeci says. Instead the family has been eating more pork, which is still more affordable, even though its price has surged alongside those for other animal proteins..Milk and dairy have also become more dear. “We used to go to the supermarket and buy a box of 12 bottles of milk per month,” says Valdeci, who retired last year but recently decided to return to work. “Now I’m having tea every day; my daughter, coffee. We rarely buy milk.” The family used to purchase big tubs of yogurt, especially the fancier Greek type, but “it got too expensive,” Valdeci says. When they really crave some, she’ll hunt down containers that are close to their expiration date, which usually triggers markdowns from sellers. The strategy also works for butter and cheese. “Some products we freeze to extend the expiration date,” she says. —Fabiana Batista.Talcher, India: Straight to Bed With No Glass of Milk.In Talcher, an eastern city known for housing the largest coal reserves in India, the stray dogs are hungrier than usual. Shop owner Bijaya Kumar Nayak used to spend 20 to 30 spare rupees a day (27¢ to 40¢) to buy biscuits for the animals roaming the streets. But he’s had to cut back to be able to afford milk for his children instead. His sons, who are 6 and 8, used to split half a liter before bedtime, but that stopped at the end of July. Nayak now buys just a liter a day from a local shop, for tea and other household needs. His kids still get milk with their cookies, but they’ve started to ask what became of their nightcap, which pains him and his wife. “I am even paying my milkman in installments as I don’t have the cash to pay on time,” says Nayak, 53..While he’s been paying down his milk debt slowly, he’s four months behind on rent for his mom and pop shop, and his electricity bill is more than a year overdue. Lockdowns and restrictions on business hours ushered in by the pandemic have sharply reduced small-business owners’ incomes. Nayak’s dropped to about 500 rupees a day in early June, from 2,500 to 3,000 before Covid‑19..At the same time, food prices have been climbing, fueled by higher transport costs during the pandemic, rising feed costs for animals, and soaring vegetable oil prices globally. India—the world’s biggest importer of palm, soybean, and sunflower oils—depends on overseas purchases for the majority of its cooking oil needs, making it particularly vulnerable when global indexes rise. Cooking oil prices in July were about 33% higher than a year earlier, according to India’s consumer inflation data. Food accounts for about two-thirds of Nayak’s total monthly budget..If he weren’t covered by the government’s subsidized food program, which is the world’s largest and allows him to buy rice and wheat at highly discounted rates, his situation would be much worse, he acknowledges. Still, he and his wife have been forced to make sacrifices. His sons have stopped getting fruit, as well as the malted vitamin drink Horlicks. His wife has been cooking more eggs for protein instead of the usual mutton, chicken, and fish. Nayak is plagued by guilt at the thought that undernourishment could affect his kids’ long-term health. “There is always a shortfall in my weekly budget, and I am not able to buy everything my wife needs for her kitchen,” he says..Nayak is also ashamed that on a visit to relatives earlier this year, he wasn’t able to proffer the customary sweets. “It was really painful and embarrassing,” he recalls. “With my income declining, how do I bring myself to spend on small pleasures of life?” Fortunately, his nephew brought extra and bailed him out..The situation is starting to look up. India’s government has recently been distributing additional grains above the subsidized monthly quota, at no cost. It also cut import taxes on palm oil and lentils and imposed stockpile limits on some cooking staples to try to better shield consumers from rising prices..Nayak’s local government has also relaxed restrictions on store hours, allowing him to keep longer hours at his shop, which sells everyday items from snacks and drinks to notebooks and photocopies. As his income inches off its recent lows, he’s allowed himself a few treats: He spent 50 rupees on fried dumplings for his sons, commonly eaten as an evening snack, a couple of times in recent weeks. “I bought chicken meat after almost two months,” he says, though he notes it was only about half the usual amount because it was so expensive. He also sprang for some papadum, a crunchy local flatbread. Still, as long as his income is constrained, he says, he can’t shop with abandon. “That makes me hesitate to spend freely.” —Pratik Parija.Columbia, U.S.: Bulk Buys Keep the Freezer Full.Melissa “Liss” Burnell recently toted home 60 pounds of pork butt from her local Food Lion in Columbia, S.C. She packed the hunks of meat in white plastic laundry baskets in the back of her Jeep Grand Cherokee Overland to make it easier to carry..Buying in bulk isn’t easy—Burnell has to make arrangements with the meat department several days in advance—but for those who can afford the upfront outlay, it’s definitely a money saver. She paid about 99¢ a pound, well below the retail price of $1.58 a pound, saving about $35 overall..She then spent hours grinding the meat with her KitchenAid stand mixer, making sausage and ground pork packages to stash in one of her two full-size upright freezers. She also sold some to neighbors at the case price. “They’ve got kids,” says Burnell, 45. “Food is expensive, and nobody wants to shop anyways.”.Although she’s feeding only herself and husband, and occasionally her adult son, who’s a long-haul truck driver, the former stay-at-home mom is a black belt when it comes to managing a grocery budget. Burnell credits her mastery of home economics—she’s perfected a copycat Bisquick pancake mix and makes her own marshmallows from scratch—with pulling her family out of debt..She’s also published e-books on the subject. In 2001, Burnell wrote that a family of four could feed itself for just $200 a month, revising that to $250 in 2012. Now it’s more like $300, she says..As food prices creep up, Burnell, who often cooks chicken casseroles for her husband’s construction crew of 10, has begun swapping in legs for the more expensive breast meat. (The price of chicken breast in the U.S. is at a more than six-year high, according to Bureau of Labor Statistics data.).Prices for chicken and other protein have been particularly inflated in the U.S. because of labor shortages at processing plants and other bottlenecks along the supply chain. Strong demand from at-home cooks is a factor, and restaurant chains such as Popeyes Louisiana Kitchen and McDonald’s Corp. are embroiled in chicken sandwich wars. At the same time, supply has been constrained as farmers in the South scramble to rebuild flocks decimated by a freak winter storm in February..Burnell noticed the cost of seafood has begun rising as well, so she’s cutting back on fish. The avid home cook tried to purchase scallops at discount grocer Aldi for a bacon-wrapped recipe she’d been itching to make again, but she decided against it when she saw that a 12-ounce package of large scallops had gone up by $4. “I’m going to wait and see if they go down,” she says..While Burnell’s middle-class family isn’t going hungry as food prices rise, millions across the U.S. are. Even before the pandemic, about 35 million Americans were considered food insecure, defined as lacking consistent access to enough food for all members of a household, according to the nonprofit Feeding America. Last year, amid the huge spike in joblessness brought about by the Covid‑19 recession, the number jumped to 45 million, or more than 13% of the population..For Burnell, who estimates she spends less than 5% of her annual budget on food, the inflation-induced tweaks and tucks have felt more like inconveniences, not great sacrifices. For example, she recently passed on some corn on the cob that looked good at Food Lion because it was 75¢ an ear. “That’s insane,” she says. She’ll grab some at another store or at the farmers market for more like $4 a dozen when corn is out of peak season, she says. “I like corn, but I don’t like it that much.” —Leslie Patton —With Megan Durisin and Agnieszka de Sousa.©2021 Bloomberg L.P.

Soaring Cost of Food Is Forcing Families to Scrimp at the Dinner Table

Here’s how families in India, Brazil, Nigeria, and the U.S. are coping with the high price of food.

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