The recent rise in food prices has cast a shadow over the holiday season, making it a less than merry time for many. According to the Consumer Price Index released by the U.S. Bureau of Labor Statistics, grocery prices saw a 0.4% increase in November. Eggs, in particular, made significant jumps, with an 8.2% rise over the month and a whopping 37.5% increase over the past year. This poses challenges for those seeking cheaper protein sources and families preparing holiday treats like sugar cookies and challah.

Unraveling the Effects of Rising Food Prices on Our Lives

Impact on Holiday Foods

The increase in food prices has not only affected the cost of common holiday ingredients but also the overall holiday shopping experience. Flour and prepared four mixes saw a 1% decline, while bread prices dropped by 1.3%. On the other hand, sugar and sweets rose by 0.2%, and butter experienced a 1.5% increase. Oranges, including popular stocking stuffers like tangerines, fell by 1.8% in the latest Consumer Price Index report. This mixed bag of price changes leaves holiday shoppers with a lot to consider as they set their holiday tables.

David Ortega at Michigan State University points out that although the increase in food prices has moderated slightly from past years, they still remain more than 20% higher than before the pandemic. This has become a key issue in the election, as people feel the sting of sticker shock at the grocery store.

President-elect Donald Trump vowed to bring down prices during his campaign and blamed the Biden administration for the current situation. However, in an interview with TIME published last week, he stated that he does not believe his presidency would be a failure if grocery prices do not come down. “It’s hard to bring things down once they’re up,” he said.

Supply and Demand Dynamics

Ortega explains that the increase in grocery prices is partly driven by the rise in egg and beef prices. The price of holiday roast has been affected by drought and high feed prices, with this year’s inventory of beef cattle being the smallest since 1951. For eggs, the combination of bird flu and increased consumer demand during the holiday season continues to drive prices up.

In the case of beef, supply issues play a significant role. High input costs and decisions made by beef producers a few years ago, when they faced drought and high feed prices, have reduced beef supply, which in turn is affecting beef prices.

The latest food price numbers also show a narrowing gap between the rise in cost of eating at home and eating out. The inflation gap between restaurant menu prices and grocery year-over-year prices is the narrowest it has been since May 2023. This indicates that while food at home prices have been rising, the increase in restaurant prices has not been as significant.

Market Concentration and Profitability

Rakeen Mabud, chief economist at the Groundwork Collective, highlights the issue of market concentration in the food industry. Just a few seed producers, meatpackers, and grocers dominate the market, which gives them significant power to drive up prices. This hurts lower-income shoppers the most, especially in states like Oklahoma, Iowa, and Arkansas, where a single grocer like Walmart or Hy-Vee dominates.

“Across the food and grocery industry, we have a sector that is deeply consolidated,” Mabud said. “And when big companies control large chunks of the market, they use inflation and supply chain shocks to increase prices far beyond what their input costs justify.”

During the holidays, companies take advantage of the increased demand and lack of price comparisons to raise prices on items that people don’t buy regularly. “Grocers and the food industry know they have more information about the underlying cost of a good than consumers who only buy Christmas ham once a year. They can take advantage of this,” Mabud said.

Impact of Policy Changes

Economists are closely watching how the next administration will affect food prices. Trump’s promise to impose heavy tariffs on the U.S.’s biggest trading partners is expected to drive up the cost of everything, including groceries. Products that the U.S. cannot produce year-round, such as fruit and coffee, will be particularly affected.

Ortega warns that even the uncertainty surrounding these tariffs can lead to a rise in costs as companies prepare for their implementation. Trump’s expected policy of mass deportation of immigrants will also have an impact on the agriculture industry, in addition to the human rights implications. A shock to the labor supply will lead to an increase in costs for producers and companies, which will ultimately be passed on to consumers in the form of higher prices.

Patricia “Pogo” Overmeyer, a 65-year-old lawyer in Arizona, has always been focused on saving money on groceries. With inflation worsening, she has become even more thrifty, using more meatless meals and stocking up on holiday food when prices are low. She plans to make substitutions and forgo some foods once she retires and her income decreases.