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Why These Supermarket Staples Are So Expensive Right Now

It's not just supply chain issues causing sticker shock at the grocery store.

Bottles of olive oil on a supermarket shelves
Global olive oil prices have increased 40% in the past year.
Daniel Harvey Gonzalez/In Pictures/Getty Images

Inflation has been leveling off, but prices on many grocery-store items are still bananas. In addition to ongoing supply-chain issues, severe weather, agricultural diseases and the ongoing war in Ukraine have all affected how much we're paying at the supermarket.

The US Bureau of Labor Statistics' latest Consumer Price Index report, released Jan. 12, shows that food prices across the board went up by 10.4% between December 2021 and December 2022. According to data from Moody's Analytics, the average American household is now spending about $72 a month extra on groceries compared to last year. 

Supermarket prices hit a record high last summer and, while they're increasing at a slower rate now, they're still outpacing inflation, which was 6.5% in December.

Jorge Barro, an economist at Rice University, says it's unrealistic to expect prices to return to pre-pandemic levels any time soon.

"I think the best that we can hope for right now is that price increases will stop or stabilize at a much lower level," Barro told KTRK in Houston

Here are the items causing the most sticker shock at the supermarket.

Read more: This Is Now the Most Expensive Fast-Food Chain in the US

Eggs

If you've been to any supermarket in the past month you've probably noticed the price of eggs has soared -- if your grocer even has any.

An ongoing bird flu epidemic has forced farmers to kill tens of millions of egg-laying hens. As a result, the cost of a dozen eggs skyrocketed by 60% between December 2021 and December 2022, according to the Consumer Price Index.

From November to December 2022 alone, Americans were paying 11% more.

In California, the average price for a dozen eggs reached $7.37 in early January, according to the US Department of Agriculture's Egg Market Overview (PDF). A year ago, it was only $2.35.

Lettuce

California's Salinas Valley, which supplies nearly half of the country's romaine and iceberg lettuce, has been devastated by disease -- not bird flu but impatiens necrotic spot virus, which is carried by tiny insects called thrips. 

Some lettuce growers reported losing 70% to 80% of their crop last year to the bug, which causes wilting, yellowing and chicken pox-like spots on the vegetables.

A supplier told NPR that a wholesale crate of romaine was going for $100 in December, three or four times the usual rate. That increase is being passed on to consumers: Last month, the retail price of a head of romaine was up by 25% from a year prior. 

Warmer temperatures in the region mean thrips aren't being killed off by winter frost.

"Without the cold winters that we used to get, we're not able to break this virus cycle," Jennifer Clarke, executive director of the California Leafy Greens Research Board, told the California Farm Bureau Federation. "It's just ramped up, and now we're seeing the effect."

Bread

Ukraine is one of the world's top grain exporters, and Russia's invasion in February 2022 pushed global prices up, especially for wheat. 

As a result, white bread is up by 17.7% year-over-year, according to CPI, and the price of other types of bread increased by 14%.

Flour cost 23% more in December than it did a year earlier, affecting prices on everything from cereal to cookies and cakes.

Russia is also a leading wheat exporter, but it has been producing less since the war began. A number of countries have also instituted restrictions on Russian imports.

Read more: Community Fridges Are Helping Areas Struggling with the High Cost of Food

Margarine

Wheat isn't the only thing affected by the war in Ukraine: The country is a major exporter of sunflower, soybean and palm oil -- all used to make margarine.

As access has dwindled, prices have rocketed: As of December, margarine costs nearly 44% more than it did a year prior.

"It might be a while, honestly, before prices come down," John Sandbakken, executive director of the National Sunflower Association, told CBS MoneyWatch.

Butter

The average price of butter was $4.81 a pound in December, up from $3.47 a year earlier, according to the Federal Reserve Bank of St. Louis

Some of that increase is due to labor shortages, supply chain disruptions and the higher price of animal feed. But droughts and record-high temperatures have also caused cattle to experience heat stress and produce less milk.

In addition, many dairy farmers significantly thinned their herds during the pandemic, CBS reported, and haven't fully ramped back up yet. Much of the remaining milk supply has gone into cheese production

The result? In December, butter prices jumped by 31.4% year-over-year.

"Basically, dairy product prices are not going to go back to average levels until feed costs and all these other costs of producing milk -- particularly expanding milk production -- go down," Peter Vitaliano, chief economist at the National Milk Producers Federation, told MarketWatch in September. 

Olive oil

About 44% of the world's olive oil comes from Spain, but droughts have devastated the country's olive crops, with a 50% decline in harvests expected.

Heatwaves have also damaged olive trees in Italy. Andrea Carassi, director of the Italian Association of the Edible Oil Industry, said the country is facing the greatest shortage in over a generation.

"Between now and next summer, we may not have enough oil for the shelves of large retailers," Carassi told Italian business outlet Il Sole 24 Ore in late November.

Other olive-producing countries such as Greece, Portugal and Tunisia are also facing shortages, with droughts coupled with labor shortages and rising production costs.

The USDA predicts global olive oil production will fall to 2.9 million tons in the 2022-2023 crop year, a decline of 11% from the previous cycle.

Global olive oil prices hit $5,792 per metric ton in December, an increase of more than 40% from 2021.

Read more: The High Cost of Living Is About More Than Just Inflation