TOP TAKEAWAYS
- Wholesale egg price declines could soon make their way to retail
- Cereals and bakery products all up in double digits
- Prices for beef, veal and bacon all show slight decreases for the year
Food inflation was up 10.1% in January, compared with year-ago levels, including an 11.3% increase in food-at-home prices, according to the January Consumer Price Index from the U.S. Department of Labor.
Egg prices continued to soar and were up 70.1% year-over-year amid the ongoing impact of the avian flu outbreak that has decimated the nation’s stock of egg-laying hens. On a monthly basis, egg prices were up 8.5% over December 2022 levels.
According to the Centers for Disease Control and Prevention, more than 58 million birds were culled in 2022, breaking the record of 50.5 million set in 2015.
Some reports indicate that retail egg prices could begin to ease, however, as wholesale prices have fallen.
“While wholesale price have declined by nearly half from their highs entering the year, the decline has not yet been realized in the retail dairy case,” the U.S. Department of Agriculture said in a recent report. “Retailers have been working to stabilize pricing as they work through supplies procured during recent record-high wholesale prices.”
Consumer demand for eggs has also declined, the report said, although seasonal demand is expected to increase again as the Easter holiday season approaches.
Cereals and bakery products up 15.6%
Among the major grocery categories, cereals and bakery products led the price increases in this month’s food-at-home index, with prices up 15.6% over the last 12 months, followed by dairy and related products, up 14%. Non-alcoholic beverages were up 13.1%.
Every single subcategory in the cereals and bakery products category was up in double digits over the last 12 months, led by flour and prepared flour mixes, which were up 20.4%.
Although egg-price inflation continued to stand out, prices for some products in the meat, poultry, fish, and eggs category have continued to decline in recent months. Prices for beef and veal were down 1.2% vs. a year ago, for example, and bacon was down 3.9%. Overall, the meats, poultry, fish, and eggs category saw price increases of 8.1%, however, led by eggs and poultry, the latter of which was up 11.2% for the year.
Among other major categories covered in the January CPI report, prices for fruits and vegetables were up 7.2% for the year, with double digit increases for fresh potatoes and lettuce and for all processed fruits and vegetables subcategories.
Inflation for other food at home, which includes sugar and sweets, soups, frozen prepared foods, seasonings and condiments, and baby food and formula, was up 13.2% for the 12-month period. There were double-digit gains across almost all subcategories, led by a 32.5% increase in the price of butter and margarine.
Andy Harig, VP of tax, trade, sustainability, and policy development at FMI — The Food Industry Association, said food prices would likely remain elevated in the short term and would be volatile during the coming months.
“Food retailers operate in a competitive marketplace that encourages them to do everything possible to keep costs down for consumers,” he said, noting that FMI’s latest consumer survey found that shoppers are spending $151 per week on average, which remains below the pandemic peak of $161 per week.
“To help consumers stretch their food dollar, grocers have dramatically increased investment in their store brand offerings, among other strategies,” he said. “Even as the inflationary outlook remains uncertain, retailers will continue to invest in ways to help shoppers save and work to ensure prices stay as low and as stable as possible so that customers can most effectively manage their grocery budgets.”
On a monthly basis, unadjusted food-at-home inflation was up 0.8% over December 2022 levels.
Food away from home prices were up 8.2% year-over-year, and up 0.6% on a monthly basis, as restaurant prices continued to increase at a lower rate than grocery prices.
Overall, inflation across all products measured by the CPI was up 6.4% over a year ago, representing an ongoing decline since the June 2022 peak of 9.1%.
