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Rising Food Inflation & Shortages May Lead to the Worst Riots Yet

Last Updated September 25, 2020 8:41 PM
Andrew Packer
Last Updated September 25, 2020 8:41 PM
  • Food shortages may develop thanks to last month’s Derecho in the Midwest.
  • Price inflation for food has already been on the rise.
  • This comes as permanent job losses and scaled back stimulus reduce household income, leading to a rise in potential unrest.

Several factors are forming the perfect storm for food shortages, higher prices at the grocery store, or outright hunger heading into 2021. The impacts have likely already hit your wallet, but may go beyond the economy, ripping the fabric of American society itself.

Food Production Hit by Storms

Farming has always been a hit-or-miss proposition. Favorable conditions combine to form bumper crops. Unfavorable conditions lead to lower production, which drives prices higher.

This year, poor weather conditions, including hurricane-level winds in a “Derecho” event across the Midwest, combined to ruin nearly half the grain crop in Iowa alone  just weeks ahead of the harvest.

The loss of crops such as corn, wheat, and soybeans has massive impacts on the entire food chain, as these grains are essential components of nearly all processed food. That includes everything from livestock to twinkies. So from protein to dairy to junk food, prices are likely to keep rising across the board.

It could also increase fuel costs, thanks to ethanol mandates  that have been used to support crop prices in recent years. It likely won’t be enough to offset weak oil prices, but it will keep gas prices from falling as much as they otherwise would.

That’s on top of food production facilities, many of which have had to shut down at least once already with the pandemic, creating short-term supply disruptions.

Economic Woes to Worsen as Millions of Americans go Hungry

Food prices had already been trending up, reaching their highest levels of price inflation since 2012 .

Food Inflation
Food prices have spiked this year at their fastest pace in nearly a decade. Source: Federal Reserve 

Unlike other commodities, food prices never really dropped after their last rise either. Instead, they traded in a range for years.

The closure of restaurants also forced food supply chains to refocus on providing consumers directly with foods, as regional shortages developed on a number of key foods at grocery stores .

Meanwhile, the pandemic-driven layoffs largely hit lower-income employees. That’s a group that’s already had to spend a proportionally larger amount of what income they do make just to put food on the table.

Household Food Spending
Lower-income households spend less in total on food, but it’s a much higher percentage of their budget. | Source: NPR 

With declining economic stimulus, including that for those with now-permanent job losses, the combination of rising prices and lower income may cause this ratio to explode. How bad could things get? By the end of the year, as many as 50 million Americans could be fighting hunger  on top of everything else 2020 has thrown their way so far.

The impact that rising hunger can have on the economy, to say nothing of the fabric of society, is anyone’s guess.

Rising food prices have been considered a catalyst for the unrest that exploded into the Arab Spring back in 2011 . It wouldn’t be a stretch of the imagination to see otherwise-ordinary Americans driven to such an extreme either.

With 2020 already being a strong year for riots to protest police brutality , the stage has been set for more extreme riots later in the year.

Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.