Food Price Inflation Slowed In June but...

Articles
July 21, 2011

Food Price Inflation Slowed In June but...

Prices remain well above prior year levels, according to the latest analysis of government data by The Food Institute. While overall retail prices reflected by the Consumer Price Index declined in June from May, retail food prices advanced a mild one-tenth of a percent – the smallest such increase this year. Nonetheless, prices during June were still up 4.7% from a year earlier.

Prices remain well above prior year levels, according to the latest analysis of government data by The Food Institute. While overall retail prices reflected by the Consumer Price Index declined in June from May, retail food prices advanced a mild one-tenth of a percent – the smallest such increase this year. Nonetheless, prices during June were still up 4.7% from a year earlier.

But that 4.7% price advance is still not as great as the 7.4% jump in wholesale food costs during the same month. According to the government’s Producer Price Index, the wholesale finished consumer food prices were up 7.4% in June compared to a year earlier. Thus The Food Institute is projecting, via its new Price Track series that retail food prices will likely continue to climb over the next two to three months.

Fortunately for consumers, during June retail prices for beef and veal actually declined from prior month levels and after running 10%-12% higher than 2010 levels for the February through May period, dropped to being about 8.2% above 2010 levels last month. In addition, poultry prices have not been rising nearly as much as other proteins and can be considered a relative bargain for consumers. Prices during June were up just 3% from a year earlier and during the month inched up only three tenths of one percent.

For those users of fats and oils, however, this has certainly not been the case, with June prices up a strong 9.7% from a year ago, climbing at a 1% monthly rate for the past two months. Higher corn prices are certainly adding to this increase as the amount of corn being used for ethanol production in the U.S. is expected to exceeded that used for animal feed for the first time this year.

A bevy of Price Track charts are available from the Food Institute on individual categories. Just go to www.foodinstitute.com, or e-mail Lina at lina.khouri@foodinstitute.com.