Asheville shoppers may continue seeing higher price tags on groceries as they stock up ahead of Thanksgiving Day and into the holiday season.
The cost of food increased by 4.6% between September 2020 and September 2021, amid the COVID-19 pandemic, according to the U.S. Bureau of Labor Statistics. The latest report shows that food has increased by 5.3% from October 2020 to October 2021.
Higher demand, supply chain issues, weather-related problems and higher labor costs are some of the factors contributing to the higher cost of food.
This could mean higher totals at the register as prices for traditional grocery items have risen when they are usually lower this time of the year.
“Thanksgiving is one of the largest food holidays of the year and most grocery companies are aggressively putting on sale those items that would be on your Thanksgiving table to woo you in to get the dollars for that season. But there is no doubt the prices on many items are higher this year,” said Carl Alguire, COO of Mother Earth Food, an online grocery store based in Asheville.
Mother Earth Food delivers to customers in Western North Carolina and upstate South Carolina. The family-owned business sources from local and organically grown produce and prepared items from regional farms and food artisans.
Locally, the company has seen costs increases for in-home food at about 2.5%-3.5% over 2020 and about 3.5%-4.5% for restaurant food, Alguire said.
“I think it’s driven by increased demand for in-home food,” Alguire said. “People are doing more cooking or are hesitant to go out in crowds. Mingling with strangers in public is still a concern. From the restaurant side, I think costs are going up relative to labor shortages.”
Holiday food demand, costs
Typically, popular holiday foods are reduced for consumers at this time of the year, said Dewey Scott, vice president of sweet potato operations at Scott Farms Inc.
Based in Lucama, about an hour east of Raleigh, the company distributes to the food service and food retail sectors in WNC, regionally and internationally.
“Normally, the price goes down on a production level and the first point of sale straight through to the customer. They normally see that translate to the shelf,” Scott said.
However, prices may be starting off higher for some items than in previous years.
The U.S. Department of Agriculture monitors the advertised prices for turkey to consumers at major retail supermarket outlets each week. Between Nov. 5-11, the weighted average advertised price for whole frozen turkey hens was $1.07 per pound compared to 96 cents per pound a year ago. For whole frozen turkey toms, it was $1.06 per pound compared to 96 cents per pound a year ago, according to a USDA spokesperson.
Sweet potatoes, another popular holiday food, reach their highest shipping volume at Scott Farms. The company harvests more than 4,500 acres of sweet potatoes each year, in addition to tobacco, wheat, soybeans, corn and peanuts.
Normally, production costs are lower at this time of year when crops are newly harvested and haven’t been in storage long enough to accrue further costs, which it will do over the course of the season. But this year, costs are higher because of pandemic-related issues. Nevertheless, contractual agreements and keeping competitive costs prevent the growers from passing along the costs to the consumer, Scott said.
“When costs go up, it’s not easy for us to build that into the price of sales, so we have to eat that and manage that,” Scott said. “We’re living in a time that’s challenging. Very challenging.”
Supply chain, staffing shortages
Supply chain and staffing issues related to the COVID-19 pandemic are among the factors driving up the prices for consumers, Alguire said. He’s witnessed the impacts within Mother Earth Food and local food partners.
“We have a lot of partners who are local food manufacturers who do prepared meals for us, but because of the labor shortage they haven’t been able to produce those at the level of demand or at all,” Alguire said. “Some of our partners have had to stop providing prepared meals to us because they only just have enough to satisfy their in-restaurant business.”
Higher price tickets may be a reflection of businesses paying employees more money to entice them to work, he said.
“With the people shortage, people are paying higher wages to attract quality labor, and it’s hard to believe that is ever going to go back to the previous pre-pandemic level,” he said. “It’s a trend that is likely to continue for quite a while, until well into next year. Every penny extra in the supply chain affects the price to the consumer.”
The COVID-19 pandemic has taken a toll on Scott Farms in many areas from staffing to production to shipping, Scott said.
The farm’s biggest challenge is the continuous rise in costs, particularly in production. What the company pays for cardboard boxes is eating away at the farm’s profits, he said. Cardboard costs have risen nearly 30% in the past 10 months, and the prices have increased three times since February.
“A lot of that is driven by a nationwide shortage of labor both in production on the farm as well as production in the inputs that we need to run our business,” Scott said.
The problem is not confined to the local or regional farms, Alguire said, but is a national problem for businesses that carry over to the consumers.
“Labor shortages are slowing down the supply chain so it’s taking manufacturers longer to put out their products because they’re shorthanded,” he said. “Component parts, like jars and lids and different pieces of the product manufacturing process are in short supply due to the backup of food containers coming from overseas. Importing has slowed, and it is definitely a domino effect.”
In August, Tropical Depression Fred caused many area farms to flood and lose crops. The lost profits from the weather event added to the challenges of operating during the pandemic resulted in price mark-ups and limited availability of products for summer and fall harvests, Alguire said.
“Due to the flooding we had late in the season, sweet potato crops from local suppliers have been a little below the standard yield they’ve seen in recent years than previous and that’s driving costs up a little bit,” he said.
Scott Farms wasn’t impacted by Tropical Depression Fred, but other unpredictable weather conditions play a role in their ability to produce quality crops.
“Weather, in general, for the last two years has been a little different than usual. We’ve had very wet summers, cooler summers, which isn’t great for a sweet potato crop,” Scott said. “We had a 2020 crop that was just below average, and we’re dealing with a 2021 crop that is all over the map — some good, some bad — but it’s not related to one weather event. It’s just our season, as a whole.”
Scott Farms is a family-owned and operated company that’s existed since the late-1800s and was incorporated in the 1980s. Scott is a fifth-generation family member working at the company. Agriculture is unpredictable but recent conditions have put a unique strain on operations at Scott Farms, he said.
“Farming is risky, farming is a gamble and we do it every day. We accept there are factors beyond our control that we have to deal with, and we learn to manage and learn to be creative. The hard part for us as an agriculture community is people are only going to pay so much for their food. They have options. They have choices. Our responsibly is to get an affordable product to them.”
The high costs are expected to last for the duration of the holiday season with no foreseeable relief, but consumers can make the most impact and positive change by choosing where they spend their money, Alguire said.
“It gives you the opportunity to support your neighbor, the people who are growing thee items for you,” Alguire said. “If you’re looking simply to save money, shopping sales or where you get reward points or other incentives that grocery chains will offer does save some dollars but the cost to our community is high. We always strongly encourage you to think about the power of the purse. Where do you put your dollar and what’s the best impact you can have for the dollar spent?”
Tiana Kennell is the food and dining reporter for the Asheville Citizen Times, part of the USA Today Network. Email her at [email protected] or follow her on Twitter/Instagram @PrincessOfPage.
This article originally appeared on Asheville Citizen Times: Asheville, WNC food costs continue to rise ahead of Thanksgiving