Inflation for food at home climbed to 12.2% year-over-year in June, the Bureau of Labor Statistics (BLS) reported Wednesday. And one again, the wholesale level is the most affected as producer prices surged to record levels due to a swell in energy costs, BLS reported Thursday.
The producer price index (PPI), which measures the prices received for final demand products, jumped 11.3% from a year ago—the highest reading since March when it hit a record high of 11.6%.
The gain, almost 90% of which came from a 10% increase in final demand energy costs as prices for oil, natural gas and other products took a big jump during the month, BLS reported. The June PPI increase included an 18.5% surge in gasoline costs.
A 2.4% rise in goods prices accounted for three quarters of the increase in the PPI and wholesale food prices approached 0.1%, BLS reported.
PPI data showed a 1.1% increase last month. Wholesale prices for food specifically increased 11.8% over last year, demonstrating the enormous impact that high input costs are having on CPG companies.
“Today’s surge in wholesale prices offers companies and consumers little reason to be confident,” said Katie Denis, VP of communications and research at Consumer Brands, in a statement Thursday. “Energy prices underpin everything CPG companies do to make and deliver products to consumers, and their ripple effect is showing up in the price of commodities the industry heavily relies on.”
On the food front, wholesale prices for beef/veal fell year-over-year, with beef/veal prices down 17.4% on the year and pork prices down more than 10%. Eggs dipped from last month but are still 123% higher than the same time last year, PPI data revealed.
“Even where there has been some slight easing, the cost environment for companies is at best uncomfortable and hoping conditions change is not a strategy–in order to reduce the impact on consumers and family budgets, we have to tackle the root causes,” said Denis. “We’ve seen too many times what the next weather disaster, geopolitical disruption or COVID wave can mean for a fragile supply chain still in recovery. Policymakers can’t miss the moment to enhance supply chain resiliency and visibility, actions that have value now and long into the future.”
Additional food categories seeing jumps in wholesale prices year over year:
- Processed young chickens, 21.1%
- Shortening and cooking oils, 32.8%
- Grains, 23.6%
- Dairy products, 21.2%
- Oilseeds, 17.3%
- Roasted coffee, 14.6%