The Markets Aren’t Closed, but a Proper Meal Costs More

Filling Your Stomach Is Easy, but Eating Well Comes at a High Cost

To understand why budgets are running dry faster, one must first distinguish the vast cost difference between simply “filling your stomach” and “eating well.” In daily diets, basic staples like rice and wheat provide the core calories needed to keep the human body functioning, and their price per unit of calorie is typically the lowest. However, nutrient-dense foods rich in vitamins, minerals, and high-quality protein—such as vegetables, fruits, meat, eggs, dairy, and legumes—are far more expensive per calorie.

According to the latest monitoring by the Food and Agriculture Organization of the United Nations and other agencies, calculated at the global average, the price per calorie for vegetables is nearly 12 times that of basic staples (about 11.9 times), while animal-based foods like meat, eggs, and dairy are 9.1 times more expensive, and fruits are 7.2 times. In contrast, many ultra-processed foods high in calories, sugar, and salt are actually about 47% cheaper per calorie than unprocessed or minimally processed natural foods. By 2024, the global minimum average cost of maintaining a healthy diet had risen to 4.46 purchasing power parity dollars per person per day. Globally, about 2.6 billion people (31.9% of the total population) still cannot afford such a nutritionally balanced, healthy diet. When overall food prices rise, household budgets are squeezed, and people tend to prioritize securing basic calorie intake, thereby reducing their purchases of high-priced nutritious foods.

Price Hikes on the Shelves Don’t Just Come from Grain Fields and Oil Wells

Many people intuitively believe that rising food prices are due to reduced grain yields in the fields or surging international prices for bulk agricultural commodities and crude oil. However, between the raw grain in the fields and the finished products on the shelves of wet markets and supermarkets lies a long and complex supply chain.

Statistical analyses show that during periods of significant commodity price volatility, the direct and indirect costs at the raw material end, such as agricultural products and energy, actually explain only a portion of retail food price increases. At the peak of food inflation in major economies, raw material commodity factors contributed about 35% to 47% to retail food price hikes. This means that the remaining 53% to 65% of the upward price pressure comes from midstream and downstream links outside of commodities.

These “midstream, downstream, and macro amplifiers” include several specific mechanisms: first, rising labor costs in food processing, warehousing and logistics, and retail terminals directly drive up the amortized cost of every item on the shelf; second, in international trade settlements, exchange rate fluctuations lead to an additional “exchange rate markup” when imported food or feed is converted into local currency pricing; third, increased market concentration in the food processing and retail industries means that some midstream and downstream enterprises are slower to lower their selling prices when costs fall, creating downward price stickiness. Therefore, even if raw grain prices retreat, increases in packaging, transportation, labor, and retail rents will keep food prices on the shelves stubbornly high.

Wage Growth Lags Behind, Depleting Dining Table Budgets Sooner

Besides food itself becoming more expensive, the relative decline in household purchasing power is another key mechanism causing budgets to run dry sooner. In recent price fluctuations, the food consumer price index has risen significantly faster than the overall cost-of-living inflation rate. At the peak of inflation, the median global food inflation rate was once 5.1 percentage points higher than the overall inflation rate.

In contrast to the rapid surge in food prices, global real wage growth has slowed or even declined, with incomes failing to keep pace with rising food costs. Since fixed, rigid expenses like housing and utilities are difficult to cut in the short term, the relatively flexible budget category of food bears the brunt of the squeeze.

Research has observed a close correlation between food prices and household food security: for every 10% increase in food prices, the incidence of moderate or severe food insecurity rises by about 3.5%, and the incidence of acute malnutrition (wasting) in children under five increases by 2.7% to 4.3%. When families are forced to spend a larger proportion of their income on basic food, the budget originally intended to improve dietary quality and purchase a wider variety of ingredients is drastically compressed.

Rethinking the Dining Table: Seeing the Complex Supply Chain

Wet markets remain open for business, and shelves are still stocked with an abundance of ingredients, yet the cost of a family eating healthily and well is quietly rising. This phenomenon reminds us that the cost of living and food security in modern society no longer depend solely on how much grain is harvested in the fields, but increasingly on the operational efficiency and cost distribution across the entire supply chain—from production and processing to logistics and retail.

When downstream factors such as labor, transportation, and exchange rates invisibly drive up the prices of fresh, nutritious ingredients, every family’s hesitation and adjustments at the checkout counter are the most direct reflections of these supply chain shifts. Understanding the transmission mechanisms hidden behind the shelves can give us a clearer grasp of our budgets and the meals on our plates as the burden of our grocery shopping grows heavier.

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Source institutions：Food and Agriculture Organization

This content is for reading and understanding research reports. It does not constitute investment advice or trading signals.