Pandemic-related impacts on the global food supply chain have triggered a domino effect of price hikes, with producer and consumer prices consistently rising over the past 12 months, according to several economic measures. Key drivers include higher demand, supply chain disruptions, and the rising cost of transportation, shipping, and labor.
At the same time, higher raw materials costs are pushing some companies to pass on price increases to consumers, reported The Financial Times (6/3).
Producer Price Index
On an unadjusted basis, the latest final demand index advanced 6.6% for the 12 months ended in May, the largest increase since 12-month data were first calculated in November 2010.
Overall, final demand foods were up 2.6% year over year.
In May, notable activity for final demand goods include:
- The indexes for beef and veal advanced 10.5%·
- Prices for fresh fruits and melons declined 1.9%
The index for processed foods rose 2.5% in May, with overall prices for processed goods for intermediate demand increasing 21.9% year over year, the largest advance since 1975.
Similarly, the index for unprocessed goods surged 57.9% year over year, representing the largest rise since 1973.
In May, notable activity for unprocessed foodstuffs include:
- Indexes for raw milk increased 10.7%.
- Prices for slaughter hogs dropped 12.9%.
Consumer Price Index
The latest Consumer Price Index increased 0.6% in May, and 5.0% over the last 12 months, representing the biggest yearly increase since August 2008.
Overall, the Consumer Foods Index is up 2.2% year over year. Other notable increases include:
- The limited-service meals index rose 6.1%.
- Pork prices increased 3.2%.
Global Prices on the Rise
The May FAO Food Price Index (FFPI) averaged as much as 36.1 points, or 39.7%, above the same period last year. It also marked the twelfth consecutive monthly rise in the value of the FFPI, bringing it within 7.6% of the peak (137.6 points) registered in February 2011.
The sharp increase in May reflected a surge in prices for oils, sugar and cereals along with firmer meat and dairy prices.
Nielsen IQ Reports Higher Price
Notable increases include:
- Fresh meat prices rose 8.6%, while processed meats were up 9.2%.
- The cost of eggs increased by 8.2% nationwide.
- Pasta, rice, dry beans, and grains increased by 5.7%.