Producer prices for beef, pork and dairy products were higher in April as the overall Producer Price Index (PPI) for the month climbed at the fastest year-over-year rate since November 2010.
Beef and veal prices rebounded in April, spiking 13.4% from the month prior (seasonally adjusted) after declining 4.3% in March and rising 13% in February, according to the Bureau of Labor Statistics. Pork was the next biggest gainer within food for the month, with prices climbing a seasonally adjusted 10.2% after a gain of 6% in March.
Year over year, on a not-seasonally-adjusted basis, producer prices are up 14.2% for beef and 25.6% for pork.
Processed young chickens, while not seeing gains as large as beef and pork did in April, still saw producer prices rise 4.7% (seasonally adjusted) in April from March of this year. The year-over-year number is more stark: Chicken prices are up 30.7% (not seasonally adjusted) vs. April 2020.
Chicken egg prices, meanwhile, fell in April from March, to the tune of 29.1%. Since April of last year, producer prices for eggs are down 41.9%.
One major issue affecting producer prices is higher costs that farmers are paying for their materials: Foodstuff and animal feed prices climbed 7.9% (seasonally adjusted) in April from March. Year over year, on a not-adjusted basis, feed prices are up 38.2%.
Higher prices that food manufacturers and CPG companies are paying—and passing along to retailers—are raising alarms within the industry because retailers are struggling to reconcile their need to cover higher costs with a perceived limited ability to raise prices for customers. The May 12 release of the April Consumer Price Index (CPI) showed that the price increases consumers are seeing at grocery stores slowed last month. In the Northeast, consumer prices for food at home were flat year over year.
Price sensitivity among unemployed or underemployed Americans in combination with a greater return to restaurants and other away-from-home foodservice venues is seen as dampening retailers' ability to take price hikes. In comparison with double-digit-percentage hikes in producer prices for beef, pork and chicken year over year, the prices consumers paid at the grocery store for meat, poultry, fish and eggs rose 2% year over year in April.
The Consumer Brands Association, for its part, called on the federal government to address logistics/transportation challenges to help address what it called a "perfect storm" of rising costs. "April's numbers confirm what CPG companies already know: It’s costing significantly more to buy the raw ingredients and materials needed to make, package and deliver essential products to American consumers," President and CEO Geoff Freeman said in an official statement.
WANT BREAKING NEWS AT YOUR FINGERTIPS?
Get today’s need-to-know grocery industry intelligence. Sign up to receive texts from Winsight Grocery Business.