Diaper prices were already soaring and now 2 diaper giants just announced they’re about to get even more expensive

baby diapers baby products
  • Two major diaper manufacturers said they are increasing prices.
  • Diaper prices already rose nearly 10% over the past year.
  • Most consumer goods are becoming more expensive because of supply chain disruptions.
  • See more stories on Insider’s business page.

Diapers are about to get even more expensive, and parents are worried.

Prices of furniture, household necessities, electronics, and nearly all other consumer goods are set to rise this year in a “perfect storm” of shipping delays, supply chain disruptions, and changes to demand because of the pandemic.

In an April earnings call, Proctor & Gamble said that it has already started raising prices of some household goods, including diapers. Further price increases will be added in September in the “mid-to-high single-digit percentages,” the company said.

Read more: A third-party seller whose baby-care business raked in $20 million in sales last year reveals his secret to selling on Amazon, Walmart, and Target

“This is one of the bigger increases in commodity costs that we’ve seen over the period of time that I’ve been involved with this, which is a fairly long period of time” Proctor & Gamble operating chief Jon Moeller said of his 33-year career.

Kimberly-Clark, the producer of Huggies diapers and Pull-Ups, also announced plans to raise prices. Increases in the mid-to-high-single digits will take effect in June, The Wall Street Journal reported.

Diaper costs rose 8.7% over the 12-month period ending on April 10, CNN reported. Further increases are likely to put additional financial pressure on low-income families. One in three US families had difficulty affording diapers before the pandemic, according to the National Diaper Bank Network. In 2020, the organization distributed 100 million diapers, a 67% increase over the previous year. Federal assistance programs like SNAP and WIC cannot be used for diapers, furthering the need.

Extreme congestion at ports is partially to blame for the increase in diaper prices. Ships carrying millions of dollars of imports are stuck waiting weeks to unload, leading to shortages and long waits. A global shipping container shortage is also making the process more expensive as container costs have tripled over the past year.

Diapers are far from the only products affected as consumers continue to spend money on goods over services. Bikes, cars, meat, cheese, and even ketchup are all becoming more expensive. Goldman Sachs analysts predict that increased prices will continue through at least the end of 2021 as the supply chain continues to grapple with disruptions and unpredictable demand.

Do you have a story to share about a retail or restaurant chain? Email this reporter at mmeisenzahl@businessinsider.com.

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The prices of corn, cotton, and wheat have surged more than 50% over the past year – and it’s driving up the cost of everything from Coca-Cola to diapers

2021 03 05T123827Z_3_LYNXMPEH240MQ_RTROPTP_4_GLOBAL MARKETS.JPG
  • Futures contracts for corn are up 96% over the past year. Cotton and wheat have jumped 54% and 50%.
  • Consumer-staple giants like Kimberly-Clark, Procter & Gamble, and General Mills are raising prices.
  • The Fed said on April 8 it wouldn’t allow a “substantial overshoot” of its inflation targets.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Commodity prices have soared over the past 12 months, and consumers are about to start feeling the effects.

Corn futures contracts are up 96% over the past year, while cotton and wheat futures contracts are up 54% and 50%, respectively.

Lumber is also on a tear, with prices rising over 265% in the past year to a record high of $1,326 per thousand board feet on Monday.

The meteoric rise for commodities is beginning to have an effect on consumer-staple companies. That’s leading them to pass rising costs on to consumers.

Coca-Cola CEO James Quincey told CNBC on Monday that his company would raise prices for its products because of the increasing costs associated with higher commodity prices.

Leaders in the consumer-staple sector, including Kimberly-Clark, J. M. Smucker, Procter & Gamble, and General Mills, have also said they will be raising prices because of increasing costs for raw goods.

Prices on most of Kimberly-Clark’s North American products are set to jump by mid-to-high single digits by the end of June, according to CNBC reports.

J. M. Smucker raised its peanut-butter prices in August. CEO Mark Smucker told analysts in November that “it was very clear that we were experiencing cost pressure.”

General Mills CEO Jeff Harmening told investors on a March 24 earnings call that his company would also raise prices in the coming months amid inflation pressures.

“So I would start by saying that inflation is very broad-based, and it’s actually global. So we are seeing it across the globe, and it’s broad-based across commodities, across logistics, across things like aluminum and steel,” Harmening said.

The CEO added that his company would “use all of the tools” at its disposal, including and “price and mix,” to offset costs.

Procter & Gamble announced on Tuesday in its fiscal third-quarter results that it planned to hike prices for baby care, feminine care, and adult-incontinence products in September to respond to higher commodity costs.

The rising price of commodities, and now of consumer goods, has some experts and US senators worried about inflation.

Sen. Rick Scott wrote a letter to the Federal Reserve Chair Jerome Powell in March raising concerns about rising inflation and the central bank’s bond-buying program.

Powell has said he plans to maintain “easy-money” policies despite rising inflation over the past few months, but Reuters reported Tuesday that Powell wrote in a letter to Scott that he wouldn’t allow a “substantial overshoot” of inflation targets.

“We do not seek inflation that substantially exceeds 2 percent, nor do we seek inflation above 2 percent for a prolonged period,” Powell said in a five-page response to Scott’s March 24 letter.

If Powell does decide to raise interest rates to curb inflation, some experts say the markets may not be ready for the results.

Mohamed El-Erian, the president of Queens’ College, Cambridge, and chief economic adviser at Allianz, told Bloomberg in an April 9 interview that the US economy was unprepared for an interest-rate shock.

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