President Joe Biden has cautioned grocery stores to lower grocery prices in the United States, in line with falling production costs. His call echoes the UN food agency’s statement in May 2023 of the world price index being at a 2-year low. 

Groceries in the U.S. proved costly in 2023, only seeing a little reprieve in November’s Black Friday deals.

For the Biden administration, food prices remain the only thorn in the side other than the Mexican border migration issue. Jobs, wages and other economic phases show much improvement. As the President seeks re-election in November 2024, he wants to ensure that Americans endorse him on affordable food prices.

Supermarkets on the Line

The rise in grocery prices in the United States coincides with handsome profit margins of 20% by major grocers.

A White House evaluation of Census information from the food and beverage sub-sector has revealed fat returns for supermarkets. These profits are far beyond those of  the pre-COVID-19 period. The White House attributes this rise in revenue over expenditure by supermarket chains an outcome of choice price markups.

Earlier before this address, Biden had hit at supermarkets by accusing them of “price gouging….greedflation.”

Jared Bernstein, who chairs the President’s Council of Economic Advisers, echoed Biden, who he said might “call out” those elevating prices.

Though there was no mention of particular grocers, the targets could have been no other than the leading retail stores in the U.S. These include Walmart and Kroger, both of which are expecting more than 20% profits.

Eggs, Milk, Bread still pricey

Bernstein was specific on the importance of basic commodities like eggs.  Though they only account for 0.1% of the U.S.’ consumer price index (CPI), eggs are very sensitive to consumer price sensitiveness.

Historically, egg prices first crossed the $1 dollar range per dozen in December 2007,  to $2.099. After the recession of 2008, the sale price kept the momentum and only fell back below $2 a dozen in May. In August 2022, the price hit $3.116 and peaked at $4.20 in December 2022. Ironically, the highest retail price for eggs was in the post-pandemic month of January 2023 when a dozen cost $4.823. By December 2023, the price had ameliorated to the still expensive figure of $2.51.

Milk, on the other hand, pointed where grocery prices in the United States were heading in the late pandemic period. The price first breached the $4 mark in April 2022, at $4.012 per liquid pound (ib). It would only cross back to the normal $3 range in June 2023. The price for December, 2023, however, according to the U.S. Bureau of Labor Statistics (BLS), was $4.008 per liquid ib. 

Contributing factors for high milk prices in 2023 included floods, which impacted production in states, like Vermont.

For bread, it was in March 2005 that costs rose above the $1 mark per ib. It was not until March 2022, however, that the price breached the $1.6 per ib mark. The retail cost of bread reached the $2 mark in as recent as 2023 on the wings of inflation. The December price was $2.024 per ib.