SAN ANTONIO \u2013 From groceries to gas, consumers continue to feel the effects of higher prices at checkout counters across the country.<\/p>\n
While inflation has eased from its peak, many everyday items remain more expensive than they were just a few years ago.<\/p>\n
So KSAT reached out to Taylor Collins, an associate professor of economics at University of the Incarnate Word, who helped explain why consumers are still feeling the pinch using a tomato.<\/p>\n
Collins said rising prices often come down to two simple ideas: supply and demand. In other words, are there more people trying to buy it? Is there less of it to go around?<\/p>\n
Growing demand for fresh foods<\/p>\n
Consumer preferences have shifted in recent years, Collins said, with more people seeking fresh and organic produce.<\/p>\n
\u201cAs people are more aware of the unhealthiness within processed foods, they\u2019re opting more for organics,\u201d Collins said. \u201cThey want more of those natural goods. That extra demand pushes the price up as well.\u201d<\/p>\n
When more consumers compete for the same products, retailers and producers can often charge higher prices.<\/p>\n
Rising costs throughout the supply chain<\/p>\n
While demand plays a role, Collins said the bigger story may be on the supply side.<\/p>\n
Before tomatoes can be planted, farmers need fertilizer \u2014 an input that has become significantly more expensive in recent years.<\/p>\n
\u201cA big one that gets under discussed is fertilizer has been going up in price significantly,\u201d Collins said.<\/p>\n
He noted that much of the world\u2019s fertilizer production is tied to natural gas production, making fertilizer costs vulnerable to fluctuations in global energy markets.<\/p>\n
Labor shortages are also affecting agricultural production.<\/p>\n
Farms rely on workers to plant, maintain and harvest crops. Collins said labor availability has become a growing challenge, however.<\/p>\n
\u201cA lot of the people who are working the tomato fields or farms are struggling with immigration issues right now,\u201d Collins said. \u201cLess labor available is going to push up the price of those tomatoes as well.\u201d<\/p>\n
Transportation Expenses<\/p>\n
Even after tomatoes are harvested, additional expenses can add up as the product moves through the supply chain.<\/p>\n
Tomatoes must be loaded up and transported from farms to distribution centers and eventually to grocery stores. Higher fuel prices are raising the cost at nearly every stage of that process.<\/p>\n
\u201cOil and gas is more expensive, which means running the tractors to harvest those tomatoes, running the trucks to get those tomatoes to the store,\u201d Collins said. \u201cAll of that creates an extra cost for the suppliers.\u201d<\/p>\n
What Consumers Can Expect<\/p>\n
Ultimately, added expenses are often passed on to shoppers in the form of higher prices at the grocery store.<\/p>\n
Dr. Collins said when you put together the extra demand and the restriction in supply, it\u2019s pretty hard to see the trend of \u201cincreasing prices\u201d slowing down anytime soon.<\/p>\n
Read also:<\/p>\n
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