Wholesale Food Prices Fall 0.5% In May

Prices for food at the wholesale level fell in May after rising in March and April, according to data from the Bureau of Labor Statistics’ Producer Price Index, released June 13. At the finished goods level, prices were down 0.6%, while the National Restaurant Association calculates overall wholesale food prices fell 0.5%. The PPI also includes data on prices for foods at the intermediate and crude level. In May, intermediate-level food prices were flat, while crude prices dropped 2.3%.

Wholesale food prices have now fallen at the finished level four of the past six months going back to December 2011–creating a problem for foodservice operators.  Many operators  put through menu-price increases in the first half of the year, responding to strong run-ups in food prices from June through November last year. This has created a disparity with price-trends at grocery stores and other food retailers. (See related story this issue.)

The overall PPI for finished goods fell 1% in May, led by a 4.3% decline in prices for energy at the finished level. The 12-month change in the overall finished goods index is now only 0.7%, a marked slowing of wholesale price increases since last year.

Among the individual food commodities, beef and veal prices fell 1.5%, the first decline in six month. Beef prices remain almost 9% higher than a year ago. Pork and other meat prices rose slightly, while poultry prices jumped 2.5% and now stand 12.5% higher than a year ago. The annualized changes of these key proteins explain why operators continue to raise menu prices.