Food prices continue to climb, showing no signs of relief. In the US, the grocery item that has increased in price the most since the start of the pandemic is margarine.
Since January 2020, margarine prices are up 56%, according to data from the US Bureau of Labor Statistics (BLS). That comes as margarine consumption has been on the decline since the 90s, reflecting a change in preference as consumers have switched to butter.
The high price of margarine provides a window into the global challenges that are keeping food prices elevated. Since January 2020, the consumer price index for food is up 20%, outpacing overall core prices by around 15%, BLS data shows.
Margarine prices spiked the most in April and May of 2022.
Margarine is made from vegetable oils, which have been affected by the Russia-Ukraine war. The price of vegetable oil went up after Russia invaded Ukraine in February. Both countries are large exporters of sunflower oil, a type of vegetable oil, exporting about three-quarters of the world’s supply. With the blockage of shipping through the Black Sea, shoppers snapped up sunflower oil, a kitchen staple, worrying about high future prices.
That triggered trade policy responses globally. At the end of April, Indonesia temporarily banned palm oil exports in an effort to stabilize prices within the country, which further restricted global supplies and sent vegetable oil prices soaring due to fears of a shortage.
Vegetable oil prices as a commodity have come down since, but it takes time for reduced costs to make their way to grocery stores.
Meanwhile butter has also seen large price spikes due to a reduction in milk production on US dairy farms and labor shortages at processing facilities. Butter prices have soared nearly 25%, according to data from the BLS. It raises the question of whether shoppers have substituted margarine for butter, looking for a cheaper alternative, since even with inflation it’s still cheaper in most forms.
With the holiday season around the corner, the demand for these baking essentials could become more intense, which has the potential to drive prices even higher.