Wholesale Food Costs Fall Slightly, But Retail Food And Gas Prices Continue To Climb

The Bureau of Labor Statistics had a bit of good news on the commodity-price front during March. After six straight months of run-ups, food prices at the wholesale level fell slightly in March. Combined wholesale food prices, as reported by the National Restaurant Association, were off 0.1% while so-called “finished foods” prices fell 0.2%, said the BLS.

The “finished foods” index surged 3.9% in February. Leading the March declines was a 21.4% drop in prices for fresh and dry vegetables as producers began to recover from crop damage caused by extreme weather in key growing regions during the winter. On the other hand, prices for most proteins continued to climb in March and overall wholesale food prices are 6.1% higher than a year ago, according to NRA.

Earlier wholesale food-price increases are now working their way downstream.  The BLS reported food-at-home prices at the consumer level jumped a strong 1.1% in March. This follows increases of 0.8% in February and 0.7% in January. Food prices in grocery stores now stand 3.6% higher than a year ago, seasonally unadjusted. The trend on menu prices has been more restrained, though they too are beginning to move higher. The food-away-from-home index rose 0.3% in March, the strongest increase since September. For the past 12 months, the menu-price index is 1.9% higher.

Bellwether operator McDonald’s said during a quarterly analysts’ call last week that it raised prices about 1% in the first quarter and, if food-price trends continue, is looking at an overall increase of about 4% this year.

Meanwhile, gasoline prices continued to increase. Gasoline prices rose 5.6% in March, according to the BLS consumer-price data, and are running 27.5% higher than a year ago. The U.S. Energy Information Administration reported average U.S. prices rose another 5.3 cents for the week ended March 18, and at a national average of $3.884, are nearly a dollar higher than a year ago. The average price for diesel rose to $4.105, $1.031 higher than at this time last year.