Inflation a 'concern' for California food bank as price hikes 'put a lot of pressure' on household budgets
Los Angeles Regional Food Bank CEO discusses economic challenges with 'Varney & Co.'
Food banks struggle to keep up with soaring demand
Michael Flood, CEO for the Los Angeles Regional Food Bank, weighs in, noting that the high prices of food and fuel as well as housing 'puts a lot of pressure on budgets.'
Inflation has been a "concern" for Los Angeles Regional Food Bank CEO Michael Flood, who stressed Tuesday that the price hikes for necessities, including food and gas, have "put a lot of pressure" on household budgets.
He also noted that the inflationary pressures have led to soaring demand at food banks.
"We’re worried," Flood told "Varney & Co." on Tuesday.
"We rely mostly on donated food from farmers, retailers, manufacturers and then we supplement that with food purchases and so being a nonprofit, it’s a matter of what resources are coming in, in terms of the amount of food, the amount of funding to supplement that food, so it’s a concern right now as we look between now and the end of the year, especially because of inflation."
FOOD BANKS ARE SERVING MORE PEOPLE AGAIN AS INFLATION SQUEEZES BUDGETS
"It’s really put a lot of pressure on families and household budgets and it’s leading a lot of people needing to seek food assistance," he stressed.
Flood provided the insight the day before July’s inflation data will be released.
Inflation sits at 40-year highs, weighing on Americans who have been turning to food banks. (iStock / iStock)
Last month, the Labor Department revealed that inflation accelerated more than expected to a new four-decade high in June, exacerbating a financial strain for millions of Americans.
The department said the consumer price index, a broad measure of the price for everyday goods, including gasoline, groceries and rents, rose 9.1% in June from a year ago. Prices jumped 1.3% in the one-month period from May. Those figures were both far higher than the 8.8% headline figure and 1% monthly gain forecast by Refinitiv economists.
The data marked the fastest pace of inflation since December 1981.
Price increases were extensive with energy prices rising 7.5% in June from the previous month and 41.6% compared to the same time last year. Gasoline, on average, costs 59.9% more than it did one year ago and 11.2% more than it did in May. The food index, meanwhile, climbed 1% in June, as consumers paid more for items like cereal, chicken, milk, and fresh vegetables.
Shelter costs – which account for roughly one-third of the CPI – sped up again in June, climbing 0.6%, matching an 18-year-high set in May. On an annual basis, shelter costs have climbed 5.6%, the fastest since February 1991.
Rent costs also surged in June, jumping 0.8% over the month, the largest monthly increase since April 1986. Rising rents are a concerning development because higher housing costs most directly and acutely affect household budgets.
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Flood pointed out the shift in the trend he has been noticing as it pertains to the demographic visiting food banks.
He noted that during the pandemic "we had so many people who were furloughed or lost their jobs and didn’t have employment."
"Now the employment picture has improved when you compare it to 2020 and 2021, so now we’re seeing a lot of people who are working, sometimes two jobs, in the family or household, sometimes more," Flood said.
He stressed that even so, "the high prices of food, of fuel, and housing in a place like Los Angeles and other metro areas puts a lot of pressure on budgets."
With inflation at 40-year highs, many Americans are looking for aid for the first time and food banks are struggling to meet demand.
Charitable food distribution has exceeded any amounts given out before the COVID-19 pandemic, although there was some relief last year.
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Distribution by California's Alameda County Community Food Bank has risen this summer and Texas' Houston Food Bank now gives out an average of 610,000 pounds.
In Southern California, the Los Angeles bank gave away around 30 million pounds of food during the first three months of this year, far more than the 22 million pounds passed out during the first quarter of 2020.
A spokesperson said that was up from 500,000 daily pounds before the pandemic.
Feeding America shows that more than 53 million people received help from food banks and food pantries in 2021 – or one-third more than before the pandemic.
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A Feeding America food bank survey earlier this year showed that 80% of food banks were reporting either an increase or steady demand for emergency food services.
FOX Business’ Julia Musto and The Associated Press contributed to this report.