Gro’s US Food Price Index shows core food inflationary pressures in the United States are accelerating in February. That trend is likely to continue, especially as increased costs of feed grains translate to higher meat prices.
Rising food inflation is increasingly a global concern. Some governments, such as Russia and Ukraine, have responded by imposing restrictions on exports, while others, such as China, are releasing food from strategic reserves and offering incentives to encourage additional planting. Food inflation can have profoundly negative effects on countries that rely on imports, particularly at a time when the pandemic has contracted economies around the globe.
Gro’s US Food Price Index aggregates on a daily basis the price movements of various food items, including grains, fruit, vegetables, proteins, and milk. It excludes prices of certain items such as corn and sugar, which are closely tied to energy markets, in order to highlight price changes in core food items. Gro also offers an Agricultural Price Index that includes energy-related food products. In addition, Gro helps its clients to create custom-weighted indices based on their particular food baskets of interest.
The Gro US Food Price Index stood at 106.45 as of Feb. 23, which is up 9% from the same date a year earlier, mainly because of rising meat costs. In spring 2020, the Index jumped sharply during the onset of the COVID-19 pandemic when meat plants shuttered, but then retreated over the summer.
Looking ahead, meat prices will likely remain elevated as feed grain costs eat into producers margins. Increased global demand for grains and oilseeds, especially from China, have propelled US corn and soybean meal prices to their highest levels since 2012 and drawn down US stocks of feed grains.
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