Surprise! Wholesale Food Prices Fall After Months Of Increases

Average wholesale food prices fell 0.9% in October, according to the National Restaurant Association’s analysis of Bureau of Labor Statistics Producer Price Index data released Nov. 15. The decline was a bit of a surprise after four months of strong gains that added 3.5% to average wholesale food prices. Still, over the past 12 months, prices have risen 7.9% and are on track for their biggest annual gain since 1980. The finished food index was actually up 0.1% but the intermediate and crude indices fell 1.5% and 1.8% respectively.

There was also a change in the Consumer Price Index data released by BLS the next day. The component tracking menu-prices increased a moderate 0.2%, same as September, but the food-at-home price index rose only 0.1%, its smallest gain in more than half a year. Food-at-home prices are 6.2% higher than a year ago, while food-away from home is up only 2.7%. The differential, combined with the run-up in wholesale food prices, has many expecting chains and other operators to become more aggressive in raising prices.