Wholesale Food Prices Jumped 1% In May; Menu Prices Continue To Rise

Maybe the much expected increases in food prices have finally arrived. Overall food prices at the wholesale level jumped 1% in May, according to calculations by the National Restaurant Association, the largest monthly gain since last November and the first gain in three months. The Producer Price Index data, from which the wholesale food price is a part, comes from the Bureau of Labor Statistics. Most forecasters feared the impact of last year’s extensive drought in the U.S. would lead to big gains in food prices this year. But so far, wholesale food prices have seen only moderate increases. With the 1% gain in May, prices are now up 3.4% over the past 12 months. Egg prices spurted 17.6% and are running 42.1% ahead of May last year.

And prices may be on a path to more gains over the summer. Prices for foods at earlier stages of processing, the so-called intermediate and crude indexes, rose more than foods at the “finished” level. Intermediate prices rose 1.1%, the largest increase since last August. And prices for crude foodstuffs and feedstuffs surged 2.1%, after falling 2.6% in April. Soybeans and soybean products, key components of animal feeds, were largely responsible for the gains.

On the consumer level, menu prices continued to rise and to outpace increases at supermarkets. The BLS’s Consumer Price Index data for May has prices for food-away-from home rising 0.2% versus April, following a 0.3% gain in April and a 0.2% increase in March. Meanwhile prices for food-at-home fell 0.3%, the second decline in three months. The unadjusted data for the past 12 months show menu prices up 2.3% while food-at-home prices are up only 0.8%.