Wholesale Food Prices Up In May, Menu Prices Still Rising

Wholesale food prices rose in May for only the second time in eight months, according to Producer Price Index data from the Bureau of Labor Statistics. Prices at the final stage of demand rose 0.3% versus the month prior, while processed food prices rose 1.1% at the intermediate stage and unprocessed foods 0.1%.

While, NRA has not yet revised its average change across the stages of production, it will be the 15^th consecutive month prices have been lower than the year prior. For the 12 months ending April, wholesale prices were 2.5% below their year-earlier levels. In spite of increases for fresh and dry vegetables and oilseeds, prices for all the proteins, including eggs, dairy, beef, veal and pork were lower.

And in spite of the favorable wholesale price environment, restaurateurs continued to raise menu prices, according to Consumer Price Index data. Menu prices rose 0.2% in May for the third consecutive month. They are a running 2.6% ahead of a year ago. Grocery store prices dropped 0.5%, the second such decline in the past three months. Grocery store food prices are off 0.7% versus a year ago. Operators are raising prices in response to increasing labor costs, not, as is typical, because their food prices are higher.