Wholesale Food Prices Keep Rising In September As Gas Prices Slowly Fall

Food prices at the finished goods level rose another 0.2% in September, their fourth consecutive month of gains, according to data from the latest Producer Price Index, released by the Bureau of Labor Statistics Oct. 12. More worrisome were much larger increases in wholesale food prices at earlier stages of processing. Meanwhile, other than in California, gasoline prices are starting to come down.

The 0.2% increase in “finished” foods followed increases of 0.9% in August and half a point in both June and July. Higher prices for dairy products and fresh fruits and melons were a major factor in the gain. At the intermediate foods and feeds level, prices jumped 2%, the seventh consecutive monthly increase. Significantly, most of the increase was traced to a 5.1% rise in prices for prepared animal feeds. And at the crude level, prices rose 1.6%, following gains of 4.6% in August and 5.2% in July. Many forecasters expect food prices, especially for proteins, to jump as much as 15% over the coming year as the effects of the drought throughout the U.S. are felt.

The nationwide average for a gallon of regular gasoline fell more than 3 cents during the week ended Monday, Oct. 15. Prices are 8 cents lower than a month ago. But California continues to see record prices, as refinery and pipeline issue affect prices. A gallon of regular averaged nearly $4.61 Monday in California. Nationwide, diesel prices also are running ahead of last week and last month.