Wholesale Food Prices Surge In February

Articles
March 24, 2011

Wholesale Food Prices Surge In February

Wholesale food prices made their largest one month jump in 37 years in February, rising 3.9% reported The Food Institute. This was exceeded back in November of 1974 when spiraling oil prices resulted in significantly higher costs for food producers and marketers. This latest increase in the Producer Price Index for finished consumer foods is driven by a 49% jump in fresh vegetable prices due to freezes and other crop issues in many growing areas. Increases of 4% or more during the month in beef and pork prices also added to that surge in the overall index.

Wholesale food prices made their largest one month jump in 37 years in February, rising 3.9% reported The Food Institute. This was exceeded back in November of 1974 when spiraling oil prices resulted in significantly higher costs for food producers and marketers. This latest increase in the Producer Price Index for finished consumer foods is driven by a 49% jump in fresh vegetable prices due to freezes and other crop issues in many growing areas.  Increases of 4% or more during the month in beef and pork prices also added to that surge in the overall index.

Of the 17 categories The Food Institute tracks on a regular basis, 13 posted increases during February, led by fresh vegetables, but also including a 7.6% jump in egg prices, a 4.1% gain in dairy prices, a nearly 10% jump in shortening and cooking oil, and a 3.2% jump in coffee prices.

  Retail food prices, meanwhile continued to increase, albeit at a much slower rate. Thus the Consumer Price Index for food-at-home was up 2.8% from a year earlier during February. This marked the tenth straight month retail food prices have increased over prior-year levels, following nine months of food price deflation in 2009.

The gap between wholesale and retail price changes jumped to 4.5 percentage points – the largest gap since May of 2010, as wholesale food prices jumped 2.8% in February alone, bring the Producer Price Index for finished consumer food 7.3% above last year. That was the largest year over year gain in that index since late 1974.

The Food Institute releases analysis of economic reports as they happen and Food institute members can access these analyses online at www.foodinstitute.com.