Wholesale Food Prices Jump In January, Menu Price Growth Still Moderate

Following five months of flat or negative changes, wholesale food prices jumped significantly in January at both the final and intermediate demand stages, according to Producer Price Index data from the Bureau of Labor Statistics released Feb. 19. Wholesale food prices at the final demand level rose 1% after falling four of the last five months of 2013. At the intermediate level, processed foods and feeds prices rose 1.7% while unprocessed foodstuffs and feedstuffs jumped 3.5%.

The BLS has changed the way it calculates producer prices beginning with the January report. Instead of the previous stage-of-processing system, the government research arm has implemented a final demand-intermediate demand aggregation reporting system. Among other benefits of the change, BLS now reports PPIs for services, construction, government purchases and exports, in addition to the previously reported price change of goods.

Food categories that saw the biggest increases in January included dairy products—perhaps driven higher by the hiatus in dairy price supports—beef and veal, unprocessed finfish and prepared animal feeds.

On the consumer level, food price increases remained very moderate with prices at both retail and foodservice rising only 0.1% in January. For the 12 months food-at-home prices have risen only 0.5%, seasonally unadjusted. Menu prices are 2% higher during the past 12 months.