Inflation, supply chain issues to keep food prices high
INDIANAPOLIS (WISH) — Egg prices are 50% higher than at this time in 2021, and avian influenza is to blame.
Shellye Suttles, an environmental economist with the Indiana University School of Public & Environmental Affairs, has a Ph.D. from Purdue University. Suttles told News 8, “This has been the worst Avian flu crisis in the history of the United States. The CDC (U.S. Centers for Disease Control and Prevention) says either 50 million birds have either been infected with the virus or culled because they had exposure to the virus.”
American farmers are also struggling to find fertilizer since much of it is imported from the Ukraine and Russia, and both countries remain at war.
“We have seen the prices of food consistently stay high for the past year and a half,” Suttles said.
It’s unknown how long food prices will remain high. The Federal Reserve this week raised interest rates a half-percentage point this week in an effort to reduce inflation. However, it may not be enough to fend off an recession, especially in Indiana.
“We are going to see less consumption of automobiles, recreational vehicles; fewer people are going to buy homes, so there will be less pipes and electrical wires, washers and dryers. All together those end up affecting a state like ours a little bit worse,” said Michael Hicks, director of the Center for Economic Research at Ball State University in Muncie.
Indiana officials are projecting a decrease in tax collections next year because of the economic downturn. Lawmakers have indicated that they may reduce spending on schools and big ticket items if there is a decrease in revenue.
Hicks said, “The state’s budget surplus in 2020, 2021 really came as a result of federal stimulus, both as a result of the CARES and the Pandemic Recovery Act.”
Indiana’s workforce still hasn’t fully recovered from the COVID-19 pandemic, and economists say the worker shortage is also contributing to high food prices.