Wholesale And Consumer Food Prices Moved Higher In June

Wholesale food prices rose in June, the Bureau of Labor Statistics reported July 12 in its monthly Producer Price Index release. Food prices at the so-called finished level were up 0.2%, while the increase at the intermediate level jumped 0.7%. At the earliest stage of processing, the crude level, prices fell 0.3%. (We usually also try to report a combined wholesale food price number that is calculated by the National Restaurant Association, but the group had not posted that number as of July 20.)

At the finished level, it was the third increase in the past four months. Prices at this level rose 0.6% in May. Perhaps most worrisome, the BLS said much of the increase in June was driven by a 4.2% increase in meat prices. The increase at the intermediate level also was influenced by an increase for meats and a 1.5% advance in prices for processed poultry, another key foodservice protein.

Wholesale food price increases have actually been surprisingly restrained. Most forecasters had expected the dramatic rise in prices for corn, soybeans and other feedstocks that resulted from the drought in 2012 to push protein prices much higher this year than has been the case. Still, wholesale food prices have begun to show some upward movement the past couple months. Last month, the NRA said its combined analysis showed wholesale food prices up 3.4% for the 12 months ending in May. That was the largest 12-month increase in 16 months.

At the consumer level, the BLS reported July16 overall consumer food prices rose 0.2% with both components, food-at-home and food-away-from-home, up 0.2%. Menu prices are only 2.2% higher for the past 12 months while prices at retail venues have risen a mere 0.9% during the period.