Here’s a financial food mystery.
On the global market, food prices have fallen. But around the world, many people still struggle to afford dinner. How can that be?
Economists track global food prices with the UN Food and Agriculture Organization’s “food price index.” This chart shows changes in the overall prices for meat, dairy, cereals, and other foodstuffs worldwide. It might seem abstract. But these numbers are connected to your daily life.
“Wherever you are in the world, you feel the effect if global prices go up,” says economist Ian Mitchell.
Global food prices soared when Russia invaded Ukraine in 2022. The conflict disrupted supplies of grain and fertilizer. But according to the food price index, that price spike has ended. In fact, prices have been falling for a year.
But those big-picture price cuts haven’t made it to the grocery store and the kitchen table.
Worldwide, people still face higher-than-ever food costs. In Nairobi, a restaurant kitchen serves smaller portions to save money on cooking oil. In Hungary, another restaurant drops burgers and fries from the menu. Its owners can’t afford oil and beef. In Pakistan, some people go vegetarian because meat is too pricey. But even vegetables cost 50% more.
So if the global food price index is falling, why does food everywhere cost so much?
Experts suggest a handful of answers.
Joseph Glauber is the former chief economist for the U.S. Department of Agriculture. He points out that food prices involve more than—well, food prices.
“75% of the costs are coming after it leaves the farm,” he says. “It’s energy costs. It’s all the processing costs. All the transportation costs. All the labor costs.”
Food itself might cost less. But the work involved in getting that food to your table? All that fuel and labor costs more. For food sellers to break even, you end up paying more at the store.
Others, like President Joe Biden, believe big business mergers have made prices climb. When food companies buy up other food companies, competition decreases. If they don’t need to worry about competing with prices from other food sellers, they can charge more for their products. But some experts find this explanation too simple.
Still others blame the strength of the U.S. dollar. Global food prices are measured in dollars per ton. When the dollar is worth more, food prices might rise in other currencies.
For example: Today, a dollar is worth about 0.91 euros. Ten years ago, it was worth about 0.75 euros. So even if prices in dollars don’t change, food costs about 0.16 euros more for every dollar spent. In some places, that difference is even higher. The costs can add up quickly.
When basic needs grow expensive, it’s easy to feel fear. But God promises to provide for His people. Even when the world changes, we can trust in the unchanging God who cares for our needs.
“Therefore I tell you, do not be anxious about your life, what you will eat or what you will drink, nor about your body, what you will put on. Is not life more than food, and the body more than clothing? Look at the birds of the air: they neither sow nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not of more value than they?” — Matthew 6:25-26
(A grocer sells vegetables in Budapest, Hungary. His wholesale costs have risen by 20-30%. AP/Denes Erdos)
