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Giving Compass' Take:
• Trey Malone, an assistant professor of agriculture, food, and resource economics in the College of Agriculture and Natural Resources at Michigan State University discusses the trajectory of food prices amid the COVID-19 pandemic.
• What do fluctuating food prices throughout the next seasons mean for food-insecure families during the pandemic?
• Learn about addressing food insecurity brought on by COVID-19.
“The food economy has been incredibly resilient so far, but now that we’re more than half a year into this pandemic, the cracks are really starting to show,” says Trey Malone, an assistant professor of agriculture, food, and resource economics in the College of Agriculture and Natural Resources at Michigan State University.
“For me, one of the biggest pandemic concerns always has been food security for lower-income households. Households that earn less than $20,000 spend nearly 40% of their income on food, and households that earn $20,000-$39,000 spend more than 20%,” he says.
“Even a small increase in food prices can mean that these people will confront difficult decisions.”
Here, Malone answers questions about the economics of food in the coming months and how the COVID-19 pandemic will affect typical seasonal patterns:
Will there be enough food products around the holidays?
So long as expectations are consistent, US food supply chains are incredibly capable of reaching their end consumers. The holidays will be a mixed bag in terms of how the pandemic will alter what people want. For example, with Halloween on the horizon, I’m not expecting candy sales to reach their normal levels given restrictions on trick-or-treating and gatherings.
With many restaurants only partially reopened, how has the supply chain changed to direct products to consumers rather than businesses?
This story is different for every industry. Restaurant sales have slowly regained some of the ground they lost earlier in the pandemic, and many restaurants already have closed. It’s too soon to say how many restaurants will remain shuttered, though eating-out expenditures in May 2020 were 37% lower than May 2019. Overall, US food spending in June 2020 was $12 million less than the prior year. Much of that change in expenditures has come from the near collapse of some restaurant business models. I’m even more concerned about moving into the winter months, where outdoor seating will be less of an option. The smaller farm businesses that focused on sales exclusively to restaurants have struggled, though many have developed online platforms to find end consumers without a restaurant intermediary.
Read the full article about food prices by Kim Ward at Futurity.