The Real Reason The Price Of Margarine Has Skyrocketed
Most of us don't need experts to tell us that food prices are on the rise. Even though the cost of grains like corn and wheat are off their highs, with wheat now at $810 per bushel from about $910 in May, per Trading Economics; and corn about $75 lower from a high of $814 in April, per Trading Economics. Barron reports that the food costs are up more than 10% in the last year, with the price tags for some grocery staples shooting up more quickly than the overall Consumer Price Index, which rose 9.1% from a year earlier.
Unfortunately, even with the breaks we are seeing in commodities like flour, corn, and soybeans, former U.S. Department of Agriculture chief economist Joseph Glauber says he doesn't see food prices overall going down anytime soon. "It [prices] still seems to be increasing...Fruits and vegetables are up about 8%, dairy products are up 13 and a half percent, and meat and poultry, and fish are up about 12%. We've had really strong food inflation across the board over the last six months or so."
While food prices are up across the board, the prices of some items seem to have risen more quickly. Margarine is 34.5% more costly and the price of butter is up 21%, according to the Barron report.
Margarine prices rose the most in June.
But why margarine specifically? Food Dive says the cost of items needed for baking and cooking — from butter to flour, was much higher in June thanks to tighter supplies. And because butter prices were already up by an eyewatering 40% and going for $2.02 per pound in January of this year, per Global Trading, people had not only started cutting back on buying branded butter to buy store label butter; they had stopped buying butter altogether and switching to margarine.
Unfortunately, margarine didn't offer much by way of a solution either, because the price of the butter alternative has risen 25%. The increase in the cost of margarine wasn't just affected by increased demand as a butter alternative but by a sharp rise in the cost of edible oils thanks to Russia's war against Ukraine, as well as Indonesia's ban on palm oil exports.
The news is not all grim. As MarketWatch points out, changing tastes and demands are beginning to have a positive impact on prices. Morning Consult economic analyst Kayla Bruun pointed out that "Meat prices declined for a second straight month in June, and the pace of price growth slowed for categories like eggs and dairy."