(The Root) — Like most Americans, you may have noticed the price of chicken has risen by nearly a quarter over the past year. Fresh vegetables and produce are increasingly more expensive. Feeding the average family of four is taking a toll on the poor, low-income and middle-class alike. The Bureau of Labor Statistics reports that U.S. inflation is relatively low (pdf) — averaging 2 percent since the recession. But the overall numbers belie a hidden truth — that food price inflation is expected to rise 3 to 4 percent this year alone, according to the U.S. Department of Agriculture.
Overall inflation remains low mostly because of the Federal Reserve’s decision to suppress interest rates — allowing banks to borrow money at near zero. The theory behind this rationale, of course, is to offer cheap capital to cash-strapped consumers, those seeking to enter the housing markets and businesses looking to invest. But following the TARP program and corporate bailouts of 2008 and 2009, banks didn’t lend. Unemployment skyrocketed, and wages continued a 40-year trend of decreasing. In fact, researchers at the Brookings Institute found that real earnings of working-age men (25-64) have declined 19 percent since 1970.
Furthermore, the “core inflation rate” of 2 percent, measured by the Consumer Price Index (CPI), is a misleading figure, because it is often reported excluding volatile measures like food, gas and oil prices.
Much has been written about the disproportionate effect the recession has had on the African-American community — with crippling levels of unemployment — but less attention is being paid to the empirical realities that such statistical analysis represents; in short, when people can’t work, they often don’t eat.
Although correlated, poverty and food insecurity are not the same. Unemployment is the strongest predictor of food insecurity — and as minority communities struggle the most in finding work, they also disproportionately become victims of hunger. The USDA defines “food insecurity” as struggling to put food on the table and often not knowing where your next meal will come from. According to Feeding America, 25.1 percent of African-American households and 26.2 of Hispanic families were food insecure in 2011. African-American households with children were affected the most — at 29.2 percent, compared to 20.6 percent of other U.S. households with kids. Single mothers were the most vulnerable, at a rate of 36.8 percent of their households experiencing food insecurity.
So what’s actually causing food price inflation? The answer is not so simple.
The effects of the Midwest drought in 2012 have become undeniably apparent in the early months of 2013. The drought — which some experts claim will worsen with climate change — has meant that prices for corn, soybeans and other grains rose sharply.
But the truth is that grocery prices have been rising 2 to 3 percent each year between 1990 and 2011. The U.S. government’s subsidy of corn production for use in biofuels is one reason. This reduces the corn supply and subsequently raises prices. Higher oil prices are also a factor, as transporting food across the country becomes more expensive with higher gasoline prices. Political instability throughout North Africa and the Middle East has also taken its toll. And increasing affluence in emerging market nations has a measurable effect: As the middle classes grow, people eat more meat — grains (for animal feed) increase in value as demand increases. The problem, therefore, is circular and compounded — meaning the drought has simply made an already tenuous situation worse.