Why inflation hit these 10 so hard in 2022

In 2022 inflation jumped to a level invisible in four decades.

But the prices of some items have inflated more quickly than others, and they’re heavily concentrated between food, fuel, and airline tickets.

Some of these fluctuations were caused by external factors that went beyond broad inflationary pressures such as faltering supply chains, labor shortages, rising consumer demand, and Russia’s invasion of Ukraine.

Here’s a look at the 10 items that generated the highest price gains, as measured by the annual inflation rate in December. Descent from the most recent Consumer price index datareleased Thursday.

In the early days of the pandemic, the federal government enacted a program that provided free meals to all public school students, regardless of family income. This program—which expanded an existing program for low-income families— is over September 30th.

Food prices in general have been under pressure on many fronts as well, which has led to them shifting to school meals.

For example, annual inflation rates for groceries and meals away from home were 13.5% and 8% in August highest since then 1971 and 1981, respectively.

The Russian invasion of Ukraine caused a shock to the energy supply, which contributed to the high transportation costs of getting food from farm to table. This has been combined with other factors such as rising labor costs to support rapidly rising prices throughout the food complex.

“Food price inflation was a frenzy,” said Tim Mehdi, chief economist at KPMG. “We haven’t seen [these levels] Really consistently for decades.”

Global shocks in major vegetable oil markets – a key ingredient in margarine – It led to an increase in the price of margarine by 43.8% in 2022.

Economists said that prices of commodities such as soybean, palm, sunflower and rapeseed (also known as canola) oil tend to move together – meaning that supply disruption tends to weigh on the group.

For example, Ukraine is the world’s first producer and exporter of sunflower oil. The war there reduced supplies.

Moreover, Indonesia accounts for more than half of the palm oil in the world. The country imposed a temporary ban on exports last year and other restrictions such as an export tax. A severe drought in Canada – the world’s largest exporter of canola oil – has choked supplies. Soybean crops fell in Brazil due to the weather.

The all-out Russian invasion of Ukraine began on February 24. By March 8, a barrel of crude oil had reached its highest inflation-adjusted price since 2014, amid concerns about the impact of the war on supply. according US Energy Information Administration.

“It caused a jump in anything related to energy,” said Mark Zandi, chief economist at Moody’s Analytics.

Oil prices Retreat In the second half of the year, with increasing fears of a possible recession and accompanying weakness in oil demand.

Gasoline prices also fell, ending the year down 1.5%. But the prices of other oil products did not fall sharply. Fuel oil and other motor fuels such as diesel ended the year with an increase of 41.5% and 32.3%, respectively.

Monthly milk production among top suppliers decreased each month from September 2021 to June 2022, according to the US Department of Agriculture.

“They’ve all been under a lot of pressure in terms of available milk supplies,” Amy Smith, vice president at Advanced Economic Solutions, a consulting firm specializing in food economics, said of the dairy complex.

Production was stable in the US, which increased exports to fill the gap. US dairy export volumes rose 5% in 2022 through October, compared to the same period in 2021, according to the USDA. data. Butter exports grew by 43% during that time – resulting in a Low butter supply At home, the economists said,

Moreover, Russia and Ukraine top suppliers of wheat. Economists said the war affected grain supplies, driving up animal feed prices and costs to farmers.

Butter prices ended 2022 up 31.4%. Other dairy products (excluding milk, cheese and ice cream) increased by 21.4%.

This request was reckless in the airline industry lack of pilotsMany were laid off or retired early in the pandemic. Aviation fuel costs rose Airlines flew Less ways. Economists said these factors hampered the supply of airline seats.

“People have shifted their spending away from commodities to travel, restaurants and ball games,” Zandi said. “The planes were packed.”

However, average prices start to fall in October, November and December.

that transmitted by insects KPMG’s Mehdi said the virus “raging” in California’s growing Salinas Valley region has caused lettuce prices to skyrocket in 2022.

The region, which has been referred to as “America’s salad bowl,” accounts for about half of the United States’ lettuce production, according To Aaron Smith, Professor of Agricultural Economics at the University of California, Davis.

Russia is also the largest exporter of fertilizers in the world. Fertilizer prices – among the biggest costs for farmers – hit an all-time high in the spring of 2022 after Russia invaded Ukraine, according to the Federal Reserve Bank of St. Louis.

Zandi said that the prices of vegetables and fruits were “significantly affected” by this price hike.

Ukraine and Russia are among the largest wheat exporters. Countries accounted for 28% of total exports globally in 2021, according to the US Department of Agriculture.

The war led to uncertainty about the volume of exports and its impact on the spring planting season, causing prices to rise. Smith said that the price dynamic affected the flour that is milled from wheat.