People are going to have to dig deeper into their wallets for the next year

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People are going to have to dig deeper into their wallets for the next year

If you haven't noticed yet, your grocery bill is likely much higher than it was just a few months ago. Prices are skyrocketing on a number of consumer staples — everything from coffee to soap to milk — as companies try to offset surging costs due to supply constraints and production challenges.

And relief may not be coming anytime soon. In fact, industry experts are warning that consumers will need to dig deeper into their wallets as we look ahead to next year.

I can tell you breakfast will get a whole lot more expensive, Yahoo Finance told Phillip Streible, Blue Line Futures' chief market strategist. Oats are up more than 80%. The price of sugar and lean hogs is up. This stems from a couple of different things — there was a cross between adverse weather conditions, which no one can really control, as well as the supply-chain bottlenecks. One commodity that has seen a significant jump in cost so far this year is coffee, with prices skyrocketing 60% due in large part to a drought in Brazil, the world s top coffee producer. As a result, Brazil s coffee crop is expected to drop by about 25% this year, compared to its record 2020 season after a nearly 40% decline in Brazil s arabica coffee crop, according to Conab, Brazil s national agricultural statistics agency.

What we are seeing right now is the ramification of Brazil s coffee production issues Many of the trees had to be completely planted and new trees had to be removed, so you've got this serious supply strain, Streible added. Cruise ships are coming back online as well as airlines. Those are major consumers of coffee, so supply will be severely strained. This week a number of consumer product makers warned that higher prices will continue to be passed on to consumers, adding to fears that inflation could become more permanent. In a call with analysts on Wednesday, Nestle CFO Fran ois-Xavier Roger said consumers should expect higher prices into next year as the company is expecting to have higher input-cost inflation as it grapples with supply chain challenges.

And some of its peers are warning of similar cost pressures. Procter Gamble CEO Andre Schulten told analysts on the company s earnings call that it is taking a market-by-market, category-by-category approach to raising prices on products as it faces higher costs of shipping and raw materials, while Unilever, the company behind Ben Jerry s and Lipton, warned of sustained price pressures.

Unilever announced in a statement that it has continued to take pricing action across foods and ice cream in response to commodity inflation, with CEO Alan Jope adding that cost inflation remains at strongly elevated levels and this will continue into next year. Going into the holiday season, you're going to see another spike in demand so coffee prices, and they're just one element of this big inflation play going on, will go a lot higher, Streible added. I really believe new all-time contract highs are just around the corner. Follow her on Twitter SeanaNSmith.