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The price you pay: Consumers forking out more money for the same food and the impact on communities

Johnson County farmer Jennifer Campbell prepares for planting on their family farm east of I-65 in Franklin
Posted at 5:00 AM, May 17, 2022
and last updated 2022-05-17 11:18:54-04

FRANKLIN — The cost to feed your family is on the rise and you see the evidence of that on your grocery store receipt.

As you pay more to check your usual items off your grocery list, WRTV digs deeper into the issue of rising food prices, including some of the causes and the impact on families.

According to ABC News, inflation is at a 40-year high and the cost of food continues to climb month over month across multiple categories from groceries to takeout.

SUPPLY-SIDE FACTORS AND HOOSIER FARMERS

Jayson Lusk, head of Agriculture Economics at Purdue University, said there are multiple factors contributing to why we are paying more for our normal food items, in addition to the record inflation.

He said with the pandemic and stimulus payments, we have more money in our pockets and increased savings and we are chasing fewer goods, which pulls up the price.

The demand for goods is strong with consumers right now, not only domestically but on the global scale. Plus, he adds, there are supply-side factors adding to cost, like the increased costs of inputs for farmers along with an increased cost for labor and transportation.

"Compared to this time last year, prices in the grocery are about 8.6% higher than they were at the same time last year," Lusk said. "That has a real impact on the bottom line. That means you are going to have to spend more for the same amount of groceries or you are going to need to cut back."

One of the most important inputs in the agriculture industry is fertilizer, and the cost of fertilizer is soaring.

East of Interstate 65 in Franklin, Jennifer Campbell works the land that has been in her husband's family for more than 100 years.

"We raise corn, soybeans and winter wheat," Campbell said. "We also do contract hogs and we have a small cattle herd."

jennifer campbell farm
Jennifer Campbell's farm east of I-65 in Franklin.

In addition to her role as a farmer and a mother, she connects with people through her blog Farmwife Feeds, where she shares what it's like to be a Hoosier homestead farmer. As our population grows more suburban, less people are aware of what it takes to run a high-tech farming business or even know an actual farmer.

She jokes and said while she enjoys visiting the casino in nearby Shelbyville, her husband won't go because he says he does enough gambling as a farmer.

"We plant a crop, we harvest a crop, we plan for next year's crop and pray a lot," Campbell said.

This planting season, the weather slowed down her family getting into the fields, but she said one positive to this season is her husband locked in fertilizer prices last fall before the huge spike in cost this spring.

Campbell said fertilizer plays an important role in the amount of food they get from the land each year.

"Fertilizer has gone up roughly 175% over last year," Campbell said. "It contributes to the crop, making the yield that we need. It also helps take care of the ground."

Lusk said this is one of the gambles farmers take every year.

"Farmers are having to make decisions today about how much fertilizer to put down and they are looking at the prices they see today, not knowing what prices will be on out into the future," Lusk said.

Fertilizer is made of three main components to support plant growth: nitrogen, phosphorus and potassium. Some also include other micronutrients, like zinc, to support plant growth.

"Fertilizer is a key input into farming," Lusk said. "If farmers don't have access to fertilizer, they won't be able to produce as much corn or soybeans or wheat in the same amount of acreage. So it's a really critical input in terms of yield increases, and if we can't get those yields, we can't produce enough food, resulting in higher food prices. So without that fertilizer, the implication is less food being produced, more land needed to produce the amount of food that we have, and if less food is being produced, ultimately that's going to imply higher food prices for consumers."

In fact, most of the corn produced on Campbell's farm in Franklin and most other farms across the Hoosier state doesn't even make it to your dinner table. Lusk said about 40% of the corn goes to ethanol for fuel and another 40% goes to livestock feed. The rest goes into food products, like starches and high fructose corn syrup, and other items.

Out in eastern Putnam County and western Hendricks County, Mark Legan and his family farm hogs plus about 2,000 acres of land using cover crops and no-till farming for sustainability. He said they feel farming is a higher calling and they are proud to be a part of their community.

It's been an interesting spring planting season battling the weather conditions, but Legan said he too was able to lock in lower fertilizer prices last fall like the Campbell's. Now, he said he worries what the rising cost of fertilizer could mean for years to come.

"If we take [a] historical look, farm inputs in [the] last ten years have more than doubled," Legan said. "To me, the really concerning part is next year."

Aside from the supply chain impact of the pandemic, the ongoing conflict between Russia and Ukraine contributes to the rise in cost and demand for agricultural goods. Russia is a major supplier of fertilizer on a global scale and Ukraine is a major exporter of wheat and sunflower oil.

"There's a lot of uncertainty in the world," Legan said.

He said crops like corn rely on fertilizer more than some other crops. Crop cycling helps replenish nutrients in the soil here in the Midwest, but fertilizer is still a major factor.

In addition to the corn they grow on the Legan farm, they have to also buy about a half-million bushel of corn to feed their livestock. He said he has seen an increase in that cost year over year, which increases the cost of raising pigs.

Plus, he notes the issues with meat processing plants during the pandemic adds to the cost of meat issues we see today and helps explain why consumers see higher prices for meat on grocery store shelves.

"Long term, we wonder how sustainable that is," Legan said. "With inflation hitting, what will be consumer's appetite for the price of meat?"

CONSUMER APPETITE FOR HIGHER PRICES

While consumers pay more out of their pocketbooks for the same food items, WRTV is taking a closer look at consumer habits to see if people are making any changes to combat rising food prices.

According to Lusk and Purdue University, for most higher and middle-income families, they are simply paying more for the same items.

"We conduct a monthly survey of over 1,200 US consumers and we ask them how they are responding to food prices and inflation," Lusk said.

Lusk said some consumers report switching from brand names to generics and they may spend a little more time looking for lower prices online or in-store, but buying behavior isn't changing much.

Some shoppers may switch from chicken breasts to chicken thighs or maybe filet to a more affordable cut of beef. But according to a report by The Progressive Grocer and data company Numerator,
prices are on the rise for goods across all channels and categories. Numerator reports grocery prices in February saw double-digit increases compared to a year ago.

Regional grocery stores are seeing the same thing.

Kroger spokesperson Eric Halvorson said the company recognizes the rising costs of products on store shelves. He said the company absorbs the costs that they can because they recognize the challenge this poses to their customers.

"We do understand what this means to people, to shoppers in general," Halvorson said. "We are cognizant of the challenge and as a whole company, we are doing what we can to reduce the burden on people."

We asked Halvorson what shoppers can do to save money at their stores as food prices continue to rise.

He suggests following the old idea of having a list and sticking to it. He said they too are seeing more customers try their generic store brand items to save a little money.

Plus, coupons - especially digital coupons - are becoming popular options to get money back on items you are already buying for your family. He said their Kroger Boost program helps customers get fuel points by just enrolling, and by purchasing gift cards, customers can score fuel points as well.

Halvorson also said don't buy more than you need. He said you don't want your hard-earned money going to perishables that will end up in the trash.

He said the Kroger Chefbot on Twitter can help customers think of ways to use their leftovers. It is technology designed to combat wasting money and wasting food. You simply take a picture of your leftovers and artificial intelligence connects you with recipes in real-time.

Kroger, like many of our local grocers, works with food banks across the community. They are seeing an increase in demand with their partners fighting food insecurity, even as many Hoosiers head back to work after the pandemic.

THE IMPACT ON OUR COMMUNITY

WRTV stopped by the Interchurch Food Pantry of Johnson County on a weekday this Spring. The food pantry, which serves the needy in Johnson County and surrounding counties, doesn't even open for another 30 minutes, yet the line of cars for their drive-thru pickup wrapped around their parking lot, spilling out onto Commerce Drive in Franklin.

Volunteers prep menus inside and unload boxes of donated goods in the warehouse on another busy day. Susan Klutts, one of the pantry managers, is in the office crunching the numbers.

"When we compared first quarter of 2022 to first quarter 2021, we are up 40%," Klutts said.

That 40% increase refers to the number of households served. It may be a surprise, but more families are in need of food now than they were a year ago in the middle of the pandemic. The job market is strong, with many businesses opening back up in the area and looking for employees, but Klutts said many people are coming to the pantry for help with food while having full-time jobs.

She said last year during the pandemic, there was a great need, but people had help.

"Stimulus checks and rent abatement and things, I think people then had more money to be able to buy food and then also the food prices weren't as high," Klutts said.

She said typically the pantry serves about 120 families per day when open, but lately they have served as many as 150. They use a card system to make sure they identify which families already got help that week.

She said Saturdays are their busy days because many people cannot come during the week due to work schedules.

The Interchurch Food Pantry partners with Gleaners and other grocery stores for food, plus they rely on donations from the community. But they also have some food items they have to go out and purchase to make sure they have enough week to week.

"The real mainstays we have to go out and purchase are milk and eggs," Klutts said, as she looked back through invoices from this year compared to last year.

eggs interchurch food pantry
Egg cartons are pictured at the Interchurch Food Pantry in Johnson County.

She tells WRTV, according to her records, milk is up 13% over what they paid last year and eggs are up 7%. Chicken is up 140%, and she had to double-check that number for WRTV, but said that is what they have on record comparing this year to last.

"It's scary from a standpoint of thinking like, if things continue," Klutts said.

Volunteer Bob Park works the drive-thru line with a smile, greeting folks as they pull up and asking what items they need. The day WRTV stopped by, they had a variety of apples and some other fresh goods and he offered those to customers while loading the food boxes and bags in the backs of their cars.

He too notices the increased need for food in his community.

"It seems to be getting more and more all the time now," Park said. "So we had kind of a trough, but now it's heading back up."

The Interchurch Food Pantry is open from 12-3 p.m. on Mondays thru Fridays. They are open on the 2nd and 4th Saturdays of the month between 9 a.m. and 11 a.m.

They are always in need of donations and volunteers to serve the community, but especially right now.

Despite the challenges they face with increased food prices and the increased demand, Klutts has a message for anyone in need in her community — "We're here."

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