What’s Going On? A Look At The Root Of Rising Costs, Tight Budgets, And More

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What’s Going On? A Look At The Root Of Rising Costs, Tight Budgets, And More

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What’s Going On? A Look At The Root Of Rising Costs, Tight Budgets, And More

13 min read MAY 07, 2025

“Why is everything so expensive?”

“It seems like grocery prices are increasing every single week!”

These are phrases and questions I’ve frequently seen in my social media feed or heard during weekly Costco trips.

And, each time I see or hear such sentiments, I quietly concur.

Taking that a step further, wondering how many families are likely in the same boat, I typed the following question into my Google search bar: “how tight are budgets right now in the average American household?”

Here was the response…

“Average American households are generally tight, with many facing challenges balancing income and expenses due to inflation and rising costs.”

My personal translation… “Okay, so my social media feed and fellow Costco shopper ramblings are on par then. At least I’m not alone!”

I suppose now is when I could share with you a few stats, graphs, and itemized numbers from research, but each time I attempt to do so, my fingertips hammer the delete key faster than I can type each sentence.

Why?

Because frankly, stats feel pretty flat when discussing something that’s realistically affecting pocketbooks all across the US…all across the world.

In my home, it feels like we’ve been financially spinning since Covid.

My husband actually got a pretty decent raise at the beginning of 2023, and we really thought we’d be able to accelerate our savings/investments in light of this, but each month it seems that increase is nowhere to be found.

I mean, we’re pretty predictable when it comes to grocery shopping, but while our list remains relatively stable, the receipt totals have continued to rise, so much so that what we thought of as a surplus has now only served to allow us to break even each month.

So, what gives? What’s driving up the cost of goods?

While I’m no economic expert by any means, I am the type of person who persistently wants to know why.

So, for all other pocketbook-affected inquiring minds, here’s what I’ve found at the heart of this increasingly common inquiry…

The Root Of Rising Costs

If your wallet has felt the impact of the rising cost of goods, first, know that you’re not alone.

And, when I say that, I don’t simply mean that those in your neighborhood are also affected.

No, when I say you’re not alone, I mean the entire world is feeling the weight of this problem, from company to consumer!

The thing is, we’re all accustomed to certain goods, particularly consumables, increasing slightly from time to time, but over the last several years, slight has turned into significant.

In fact, experts actually refer to such price increases as substantial.

So, let’s do a little economic exploration today and take a look at why this is happening.

The fact that the cost of goods has increased in such a manner, especially continuing in this trend over the course of several years, tells me one thing right off the bat - there are multiple factors affecting this outcome.

1- Global Inflation

First, inflation across the globe is greatly affecting pricing.

Inflation is defined as “the continued increase in the average price of goods and services in a given region.”

But, as this is affecting far more than a single region, we must look at those factors which have impacted the world as a whole…and two things immediately take the stage:

As much as we’d all like to forget Covid, the pandemic has indeed had a great impact on far more than health alone, specifically contributing to financial woes still felt today, nearly 5 years later.
Then, it’s easy to think that the Ukraine/Russia war and other conflicts abroad don’t affect the average family around the world, but such an assumption would be entirely false. Any war, no matter the location, has the potential to have a ripple effect, impacting countries near and far, in many ways. Here, adding to rising inflation on the heels of the pandemic.

But, how do these two factors affect the average household grocery bill?

As you can imagine, illness which impacted the entire world caused severe disruptions in supply chains, causing prices to soar.

And, the war between Russia and the Ukraine has only served to exacerbate this issue.

You see, we like to think of the cost of goods as a simple matter, but unfortunately it’s far more complicated than that.

When supply chains are disrupted, this affects the overall availability of goods, at which point the law of supply and demand greatly influences pricing.

In other words, when the supply is low and the demand is high, the cost of goods increases.

The thing is, though supply (as a whole) has been negatively affected, the demand for goods and services has continued to rise, and this is why we’re continuing to feel these effects on such a grand scale.

2- Inflation In The US

Inflation can have global impacts, but these effects can differ in severity from one country to the next.

Here in the United States, according to the experts, the primary things contributing to inflation (directly impacting the cost of goods) include:

supply chain disruptions
a continual increase in demand from consumers
the rising cost of energy
labor shortages
government spending/taxation

As with global inflation, the pandemic as well as various global conflicts have contributed greatly to inflation in the US, here particularly in relation to the supply chain.

Then, these disruptions and their effect on pricing have been exacerbated by increases in consumer demand.

Sometimes such increases arise out of fear, something many of us witnessed during the pandemic with items such as toilet paper. But consumer demand can also increase as we anticipate prices going up.

Of course, demand can increase for positive reasons as well, such as when our preferences shift over time or when income rates rise.

And, as you can see from the list above, we also must not forget that energy costs and labor play a role in pricing as well, for when it costs more to make a product, those increases inherently get passed down the line to the consumer.

As for government spending and taxation, we realize this is a major topic in American politics right now, a polarizing one at that, but what both parties can agree upon is basic economics, namely that what happens in our government (or any government for that matter) can have a direct impact on average citizens, even the price of goods and services.

3- Supply Chain Disruptions

I know, we’ve mentioned supply chain issues while looking at both global and national inflation, but as this is a highly influential factor affecting the price of goods, particularly consumables, let’s dig a little deeper into this topic.

There are several ways the supply chain can affect the price of goods.

First, transportation affects both cost and supply.

If transportation costs increase, the price of goods increases.

And, if transportation is hindered, supply is also hindered, further driving up costs.

Transportation can be negatively affected in a variety of ways, including weather, construction, port congestion, infrastructure, labor shortages, energy costs, and more.

Then, environmental factors also play a role in the supply chain.

This can occur intermittently due to weather related issues, but it can also be rooted in long term (increasing over time) environmental concerns.

Regarding weather, consider the recent effects of Hurricane Helene in North Carolina and the surrounding areas.

Many farmers in this area not only lost crops and food for their livestock, they have also lost the ability to plant this season. No planting means no harvest, and that lack of harvest greatly affects the supply of goods.

Look at this on a global scale, including all natural disasters, and you can see what kind of far-reaching effects this could have on pricing.

But, natural disasters aren’t the only things affecting supply within the environment.

Deforestation, changes in climate (even if only for a season), changes in habitat, and more all directly affect the supply of goods.

And once again, when the supply of goods is diminished, this makes such items more valuable, leading to rising costs.

The thing is, consumables are practically unavoidable, meaning demand is not going to decrease, causing a continual uptick in pricing.

I mean, when it comes to some services, we can pass for a season.

Concerning clothing, decor, furniture, dishes, and other similar items, we can re-home, re-make, thrift, or re-use many of these things.

But consumables, you can’t just say, hmmm, I think I’ll skip fueling my body with nutritious foods and drinks until the supply chain improves - and, that’s why your grocery bill continues to rise week after week.

Again - demand increases, supply decreases, and prices rise.

It’s not a pleasant reality for our wallets, but it’s a reality, nonetheless.

…But, What About Coffee?

When it comes to consumables, coffee is a very important item to consider!

Why? Because this popular beverage isn’t just a powerful source of whole-body health fueling goodness, it’s also a practical source of great joy…one of life’s simple pleasures if you ask me (or pretty much any coffee drinker on the planet, right?).

So, where does coffee fit into this discussion?

Like other consumables, coffee is greatly affected by the things we discussed in the above section. You may have already noticed the increasing price of coffee both at your local coffee shops as well as your at-home brews.

In fact, coffee production and shipments might even be affected more than other goods right now, and here’s why…

1- Growing Conditions

Remember the brief scenario I mentioned above about how Hurricane Helene had affected some crops and livestock in North Carolina?

Well, similar things have been happening in coffee growing regions all around the world.

Here’s a few examples summed up in the following statement: “The 2024 coffee growing season saw a drought followed by August frost in Brazil, and flooding in October came in the wake of a drought in Vietnam. Brazil’s coffee exports during the month were down 7.4% year-over-year and Vietnam’s December export fell nearly 40%, according to a January report from the International Coffee Organization.”

But, Brazil and Vietnam aren’t the only places affected.

Apart from natural, even normal (albeit unfortunate) impacts, climate change is rapidly affecting coffee growing regions, resulting in a decrease in output (aka supply).

In some areas, deforestation and the use of harsh chemicals in the coffee growing process are playing a detrimental role, destroying soil integrity and decreasing the amount of healthy land to produce/grow coffee.

In other areas, experts believe climate change to be the culprit in a crisis of rising temperatures.

While coffee grows best in tropical climates, those which we typically think of as being warm and humid, that term ‘warm’ is highly conditional.

In reality, coffee grows best within a very specific range of temperatures, and when temps get too hot, coffee growth is greatly hindered.

Warmer temperatures not only stunt coffee plant growth, but these conditions also invite pests and disease.

On top of that, warmer temps also contribute to unstable weather patterns, something that spells doom for almost any type of plant growth, especially coffee.

Unfortunately, each of these situations has a compounding effect.

And, because of these experts fear the future of the coffee industry may be marked by a “dramatic decrease in total coffee supply by the middle of the century, [which] could lead to market instability, price volatility, and even social unrest in coffee-producing communities that rely heavily on the industry for their economic and social well-being.”

Each of these looming issues and threats make planetary protection and the support of small family coffee farms a top priority.

To add, until these environmental effects are remedied, like other consumable products highly dependent upon nature, the coffee supply is/will be greatly affected.

2- Increase In Demand

I guess you could say the secret’s out.

Today, in the age of information, more and more folks are learning about the extremely potent benefits of coffee.

Many years ago, people consumed coffee solely for the taste and the happy pick-me-up they received first thing in the morning.

But today, those reasons for coffee consumption have greatly amplified, leading to an increase in demand as much as 150% in some countries.

Coffee is considered a superfood, a consumable containing multiple health-enhancing antioxidants, vitamins, and minerals which have been scientifically proven to boost heart and brain health, reduce the risk of some cancers and diabetes, aid in weight management, enhance athletic performance, increase energy, promote longevity, and more.

Aside from this, we’ve also…well…we’ve really upped our brewing game!

And, as folks have become at-home brewing experts, this has increased the demand for truly delicious, joy-inducing, health-enhancing coffee.

In particular, this has increased the demand for specialty coffees, including those grown with the health of both people and planet in mind.

That’s a great thing, right?

Yes! But, as we learned earlier, an increase in demand can cause an increase in pricing, especially when the supply of goods is negatively impacted.

3- One More Time…Supply Chain

I get it, if I say supply chain one more time…

The thing is, while coffee is uniquely healthy and undeniably amazing, it’s also no different than any other consumable good - meaning supply and demand are ultimately king when it comes to pricing, no matter the item in question.

With climate changes, habitat destruction, inclement weather, and more, all of these ‘hits’ to the global coffee supply are contributing to rising coffee costs.

And, while these ‘hits’ are felt around the world, non-growing regions are likely to feel these impacts in a greater way.

Think about it this way: If I grow tomatoes, and you wish to buy my tomatoes, but you’re not local, then this means I’ll have to ship my prize-winning, red, ripe maters to you, adding transportation costs, energy expenses, and more to the final bill.

Of course, as all coffee lovers know, this beloved bean simply isn’t something that can be grown in your raised garden bed in your backyard here in America, which means those added expenses are non-negotiable.

I know…this feels like a Debbie Downer segment from Saturday Night Live, right?

Trust me, that’s not our intent. It is also not our intent to be political or to persuade your political leanings. However, we do feel it is our responsibility to understand and be transparent about what is happening with coffee around the world.

Arabica beans, largely considered the highest quality coffee bean, known for its low acidity and smooth flavor profile, are costing brands on average a dollar or more per pound with the shortages coming out of Brazil and other regions.

In the last year alone, brands such as VitaCup have increased their coffee prices twice and are expecting even more to come. Brandon Fishman, founder of VitaCup, spoke openly about what the coffee market is experiencing, "I don’t think people understand the scale of what’s coming. I’m not talking about 10% price increases. It could be 50% or more, especially on private-label brands at big-box stores."

Even the biggest brands haven't been able to stave off increasing prices for their consumers. Household names such as Folger's were forced to increase their prices twice in 2024, and Maxwell House also bumped up prices. Unfortunately, more price increases are expected across the industry within the next few months.

We understand this a real concern for all of our fellow coffee lovers. However, there is relatability, appreciation, and a collective air of empathy when we understand a bit of the why behind what we’re all facing due to the economic impacts which have caused budget tightening trends in households.

While it may offer only a small amount of comfort, you are not alone when it comes to the impact of rising prices on consumer goods. Brands and consumers are all greatly affected, and with the more we know about why this is happening, hopefully the more we all can be prepared.

Check out Lifeboost Coffee Grata Medium Roast.

Becky Livingston Vance Content writer

Becky is a mother, educator, and content writer for Lifeboost Coffee. She has had three years’ experience as a writer, and in that time she has enjoyed creatively composing articles and ebooks covering the topics of coffee, health and fitness, education, recipes, and relationships.