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The Real Reason Your Grocery Bill Continues to Skyrocket

Food prices have risen dramatically in the past few months, but maybe not for the reasons you think.

The coronavirus pandemic has resulted in a number of stunning developments when it comes to grocery shopping, not least of which is sky-high prices due to a combination of high demand and limited supply. However, a new report makes clear that it's not the actual lack of food items that are causing high prices at your grocery store, but chinks in the supply chain that are making it tougher to get food to supermarkets.

The increased demand brought about by stay-at-home guidelines, restaurants being closed, and lessened supply due to coronavirus outbreaks at food processing plants have caused record increases in prices of food. As a result, households on a budget are seeing price increases of up to 10% on some food staples like beef.

According to experts, though, the reason behind the spikes in costs is the newfound challenge of how to move food along the supply chain amid the coronavirus outbreak.

"Food prices are rising not because we don't have enough food, but mainly due to the fact that the agri-food supply chain is currently unable to deliver when and where food is needed due to the shortage of labor, particularly at farm level," Sanjib Bhuyan, an associate professor at Rutgers University's Department of Agriculture, Food and Resource Economics, told TODAY.

The coronavirus pandemic has effectively shut down a number of enormous industrial food outlets. For example, remote learning has ended all school lunches for the past few months. Cruise ships have temporarily suspended service,  as has their massive need for food, and of course, with next to no dining options, restaurant's supply orders have dipped precipitously. Shifting the food supply chain from one target to another is very much like the proverbial turning of an aircraft carrier—it's enormous and takes a considerable amount of time and effort.

And, it's not just the redirection food deliveries. The coronavirus outbreak has been particularly harsh for food processing factories, with meatpacking, seafood processors, and even fruit and vegetable workers being negatively affected. So, the high grocery prices are not due to a lack of supply at the root level, but a short supply as a result of workers and shipping being severely constricted due to COVID-19.

The good news? Experts believe that the skyrocketing prices are temporary. "Fortunately, I believe that this food price rise is temporary. It should mostly disappear as soon as the virus-induced restrictions are lifted, allowing the agri-food supply chain to resume its normal functions within a short time afterward," Bhuyan said to TODAY.

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