Wholesale Food Prices Fell in May; Menu-Price Rise Moderate

Wholesale food prices fell in May for only the second time in 11 months, according to data from the Bureau of Labor Statistics’ Producer Price Indexes. Overall prices at the wholesale level were down 1.3% from April, the National Restaurant Association reported in its Trendmapper analysis of the data. Meanwhile, on the consumer side, food-at-home prices continued to increase strongly, while menu-price increases were more moderate in May.

The BLS said prices for so-called “finished” foods at the wholesale level fell 1.4%, after rising 0.3% in April and sinking 0.2% in March. The finished foods index soared 3.9% in February, as the effects of severe winter weather battered fruit and vegetable growing regions.

But while the pace of wholesale food-price growth has moderated, overall prices remain 5.5% higher than a year ago, the NRA said.

The biggest drops in May were for fresh fruits and vegetables, as producers began to catch up from the winter crop losses. But all the proteins saw modest prices decreases, too, except processed poultry, which was up only 0.1%. Price run-ups for beef and pork have had many foodservice operators switching their menu mixes to favor poultry. Poultry prices have declined during the past year, while nearly all other foodstuffs were rising.

Consumer Price Index data showed grocery-store food prices up 0.5% in May for the second month in a row, continuing a string of strong price gains. Food-at-home prices stand 4.4% higher than a year ago, on a seasonally unadjusted basis. Menu prices rose only 0.2% on the heels of 0.3% gains in March and April. For the past 12 months, food-away-from-home prices have risen only half as much, 2.2%, as food-at-home prices. That differential may explain in part why restaurant traffic counts have not dropped much this spring in spite of the big run-up in gasoline prices.