John Harriger loves a good steak, but these days it's an expense he can no longer afford.
The 66-year-old Virginian has been living off Social Security since a work-related back injury in 1994. That’s $1,800 a month total for Harriger and his wife.
With grocery prices up 13.5% over the past 12 months and gas prices above $3.39 a gallon, Harriger has had to make cuts. He’s down to two meals a day instead of three – typically a peanut butter and jelly sandwich for lunch and trout for dinner if a friend had a good day fishing.
He filed for bankruptcy two months ago, which made his cost of living more manageable. Basic monthly expenses like groceries and electricity now cost him about $1,500 instead of $2,400, but he still worries.
“You’re sitting there, wondering whether you’re going to have (enough) at the end of the month to pay your bills and whether you’re going to get food to feed your family,” Harriger told USA TODAY. “It puts you in a distressed state.”
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Inflation is hurting food budgets
With inflation rates hovering near 40-year highs, Americans are feeling squeezed.
August’s inflation levels were up 8.3% from a year ago. Meanwhile, the inflation-adjusted median U.S. household income was essentially unchanged from 2020 to 2021.
Consumers are paying 11% more for overall food items than they did a year ago, according to the monthly Consumer Price Index report, released Sept. 13.
But the prices of many staples rose much higher than that, particularly for items that used to be cheaper options for families looking to save.
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A sample of price increases from August 2021 to August 2022:
Dairy and related products: 16.2%
Cereals and bakery: 16.4%%.
Butter and margarine: 29.3%.
And it will probably get worse before it gets better, the report said. Americans can expect to continue paying more for almost all food items, according to the USDA's Food Prices Outlook for 2022, whether you cook meals at home, dine out or buy food elsewhere.
Food-at-home prices, the cost of groceries, will increase 10% to 11% in 2022, the agency predicted. The cost of dining out is expected to increase 6.5%-7.5%.
Families are cutting back on grocery spending
"Inflation and rising prices are changing the way average Americans spend,” said Jill Gonzalez, an economic analyst for WalletHub.
“They are cutting down on eating out and buying things they don't really need and focusing their budget more on essentials like groceries and utilities. Those with very low incomes are only spending on the basic necessities.”
A recent Gallup survey found nearly 1 in 4 families are cutting back on spending because of inflation. The poll revealed that price increases are a source of hardship for most Americans compared with a year ago.
The poll, conducted through August, found 56% said inflation is causing financial hardship for them and their households, including 12% who describe it as severe. That’s up 9% from when people were asked the same question last November.
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Paula Adams, 59, a systems analyst who lives in Cincinnati, said she notices how the cost of basic items at the grocery store such as sugar, milk and meat have gone up significantly in her area. She said one result of inflation is that she orders out for food less often.
“We have an expectation that things go up a couple of cents, but when some of the staple items increase by a dollar, that makes you go, ‘Whoa.’ Those are things you need in your home,” she said.
Why are grocery prices up?
COVID-19-related supply chain interruptions, the war in Ukraine, energy prices, climate change and a host of other factors have contributed to higher grocery store prices.
“It's not just one driver (causing) these high food prices,” David Ortega, a food economist at Michigan State University, said. “They're all sort of coming together and compounding on each other.”
Certain items are getting hit especially hard because of industry-specific drivers.
Eggs are up 40% year-over-year and chicken is up nearly 17% in part because of an avian influenza outbreak. Coffee is up 18% after suppliers in Brazil were hit by a drought and frost last year. Flour is up 23% as a result of the war in Ukraine, which is a major wheat producer.
Though commodity prices are beginning to fall, Ortega says consumers shouldn’t expect prices at their local grocery store to ease anytime soon. For every dollar spent on an item at the grocery store, only 16 cents is tied to the farm. The remaining 84 cents comes from other factors such as processing, transportation and energy, and the retail trade.
“The rate of increase, which is what inflation is, will eventually come down to much more reasonable levels. (But) prices won't go back to levels prior to the pandemic,” Ortega said. “Prices are what I like to think of as called downward-sticky, meaning they tend to rise quickly but take much longer to come down.”
He added that COVID-19 supply shortages and the war in Ukraine will eventually ebb, but factors like climate change will continue to drive up food costs in the long term.
How can I save money at the grocery store?
More consumers are changing the way they shop, according to research from Purdue University’s College of Agriculture.
A survey of more than 1,200 Americans in February found 31% saw little to no change in their shopping habits because of inflation. By July, that number had dipped to 22% as a greater share of shoppers said they were looking for more sales and discounts, switching to generic brands or using more coupons.
That shift took place as inflation began to eat into personal savings.
While stimulus checks and lockdowns allowed many households to cushion their savings accounts in the early days of the pandemic, “we kind of got to a point where we’ve eaten through a lot of that,” said Jayson Lusk, a distinguished professor and head of the department of agricultural economics at Purdue.
“As a result, people are tightening their belts.”
Ortega said consumers should be flexible with the products they buy and look for store-brand labels when shopping.
Meal planning, making a list of must-have items and shopping around at different locations also can lower grocery expenses, Ortega said. To avoid impulse purchases, he suggests shopping on a full stomach and leaving the kids at home.
Lauren Cobello, a frugal-living expert who runs a website on saving money, said shoppers should take note of the grocery stores’ flyers to trim costs. The front page typically cycles through “loss leaders,” items that businesses are willing to lose money on to get people inside the store.
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Shoppers who find an item they like on the front flyer should stock up because it’ll take time for the deal to return, Cobello said.
She also suggests scrounging for coupons. She has had luck reaching out to companies to ask if they have coupons available on certain products.
“Ninety-nine percent of the time that they have coupons, they’ll send them to you in the mail,” she said.
Once at the store, shoppers should keep an eye on where items are shelved. Cobello said items on middle shelves tend to be more expensive, and products like spices are cheaper in the international food aisle compared with their counterparts in the spice aisle.
Apps also can be useful.
Flipp can help shoppers compare prices on stores’ weekly digital flyers, and rewards apps like Fetch Rewards, Ibotta and Checkout 51 can earn consumers points toward gift cards or cash back just for scanning their grocery receipt.
“People are struggling. They’re having a hard time putting food on the table, and everything is becoming more expensive,” Cobello said. But "there are so many resources out there that can help you stay on track.”
Americans are turning to food banks to feed their families
The desperate situation many families are facing is evident in food banks across the country, said Vince Hall, chief government relations officer for Feeding America, a nationwide network of food banks.
“The rates of food insecurity were bad before the pandemic, and they got much worse during the pandemic,” Hall said.
While inflation is squeezing all consumers, lower-income households are hit hardest because they spend a greater share of their income on basics like food. The lowest income quartile in the U.S. spends more than a quarter of their income on food, according to 2020 data from the U.S. Department of Agriculture.
A report in June from the nonprofit found more than 53 million people in 2021 turned to food banks, food pantries and meal programs for assistance, one-third more than before the pandemic.
“The economy has reopened, and many Americans are back on the job but are finding their wages aren't enough to cover their rent, their utilities, their gas and especially their food budget,” Hall said. “We’re seeing, increasingly, families having to rely on food banks on an ongoing basis because they’re just struggling to afford the high cost of living.”
Lucy Rosario, 64, has been turning to Food Bank For New York City. She said she focuses on not wasting food and finding ways to stretch meals for her family, like using 1½ cups of rice when a recipe calls for two.
“It’s very tight,” said Rosario, who is retired and makes less than $2,000 a month from Social Security. "I'm on a fixed budget and food's going up. I'm going to think twice before I make a (purchase)."
Contributing: Susan Selasky, Detroit Free Press
This article originally appeared on USA TODAY: Americans weigh in on how inflation, rising prices affect daily life