Inflation in the U.S. hasn't slowed down, as the USDA predicts grocery store food prices will jump between 5% and 6% this year.
"What we're seeing is a continuation of a perfect storm scenario that we've been dealing with since the start of this pandemic," Feeding America COO and President Katie Fitzgerald said on Yahoo Finance Live (video above). "It's just that the forces have sort of shifted. So on one hand, [there are] increases in demand that are being brought about by the increased food prices that are applying a lot of pressure on families and especially on the budgets of low-income households, where a third of their budget is spent on food."
The higher cost of food isn’t just hitting consumers’ wallets but also the organizations and food banks that provide food for the most vulnerable Americans.
“We're paying about 40% more for the food that our network is purchasing,” Fitzgerald said. “And what a lot of folks don't understand is, when we get donated food, which is down in our network, we still have to pay the fuel and freight costs to move that food from point A to point B. And so, this combined impact of increased demand and the increased cost of doing business is continuing to make this a real struggle for the Feeding America network of food banks.”
With inflation at 8.5%, the highest rate since 1981, and the average price of a tank of regular gas at $4.30 according to AAA, the conditions are less than ideal for an organization like Fitzgerald's.
That combined with fuel prices, Fitzgerald noted, is what she fears is "pushing more people into food insecurity." According to the USDA data, 12 million children were experiencing food insecurity before inflation started driving prices higher.
A January 2022 study from Lending Club found that 64% of Americans are living paycheck to paycheck and just one economic shock away from being unable to pay their bills. And, 48% of those earning at least $100,000 are also living paycheck to paycheck. Many households like these, however, do not qualify for federal nutrition programs, which is where food banks and other organizations come in.
"We had 38 million people facing food insecurity in the U.S. before these prices went up," Fitzgerald said. "And then for food banks, we're seeing the same pressures applying where those costs of purchasing food —which we've had to come to rely on to meet this elevated need as well as other critical challenges in the supply chain — continue that are making it really hard for us to meet the need right now that we're seeing in communities."
On top of that, inflation is also exacerbating food insecurity disparities that existed even before the coronavirus pandemic.
“Black households were almost 2.5 times more likely than white households to be experiencing food insecurity, Latin households about two times more likely," Fitzgerald said. "What we've seen through the pandemic is those disparities and gaps have only grown."
Rachelle is an anchor for Yahoo Finance.