Producer prices in June jumped 7.3% year over year, beating May's 6.6% advance—which was itself the biggest 12-month spike since 2010.
On a month-over-month basis, producer prices climbed 1% in June after rising 0.8% in May and 0.6% in April, according to the Bureau of Labor Statistics' latest producer price index (PPI). For final demand foods, prices rose 0.8% in the month. Prices for meats, processed poultry, slaughter poultry and raw milk all moved higher in June, while prices for corn and oilseeds fell.
Beef, pork, processed chickens and processed turkeys all continued their month-to-month and year-over-year gains in June. Beef and veal producer prices rose 5.6% in June from May and are up 41.4% over June 2020. (By contrast, the prices that consumers paid at the grocery store for beef rose 4.5% in June, according to the monthly consumer price index, released July 13.) Pork producer prices, after slipping 3.1% in May, rose 4.8% in June and are up 32.7% year over year.
Grains prices, after soaring 25.7% month over month in May, declined 8.6% in June. However, year over year, grains prices still were up almost 94%.
Similarly, oilseeds prices retreated 11.7% in June after spiking 19.5% in May, but prices remain 68% above June 2020 levels.
Other gainers in June included fresh fruits and melons, with producer prices up 2.6% for the month and 3.7% year over year, and roasted coffee, with prices accelerating 1.6% in June from a 0.5% gain in May and a 1.3% decline in April. Wholesale coffee prices have spiked in recent weeks as a severe drought in Brazil and surging demand worldwide with the lifting of COVID-19 restrictions are creating misalignment in supply vs. demand.
"For much of 2020, food retailers enjoyed excess demand (and the pricing power that comes with it), while also experiencing benign food input costs," MKM Partners wrote in its analysis of June's PPI numbers. "That ideal combination is now reversing. ... Retailers will bear the majority of this burden."
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