Gro’s US Food Price Index is up nearly 20% from this time last year, signaling intense inflationary pressure on basic food necessities from beef and chicken to grains used in making a wide variety of packaged food products.
The Gro Food Price Index’s current reading is 134.7, the highest level in the index’s history. The index rose 11% just in the past month, underscoring the risk that food price inflation will be an ongoing concern. That will have global impact, given the outsize role of the US in worldwide food and agricultural markets.
The latest jump in food prices comes as the US government this week reported that the Consumer Price Index increased by 6.2% in October from a year earlier, the fastest gain in more than 30 years.
Gro’s Food Price Index reflects prices on a representative basket of consumer food items. The index updates daily and provides an inflation estimate for the current month, which is up to six weeks ahead of when official US government data becomes available.
Gro customers use the index to analyze which commodities are driving retail food inflation. Food manufacturing companies use the index to estimate cost inflation on a month-to-month basis or to build a custom-weighted index to analyze how a basket of goods central to a company’s core business is affected by inflation. Contact email@example.com for more information on how the Gro Food Price Index can benefit your organization.
Beef prices are up 33% from the beginning of the year, while poultry prices have more than doubled. Driving prices are strong domestic and international demand, high feed costs, and supply chain disruptions. Grain prices also have increased, driven by crop losses, especially in wheat and oats. Wheat prices have increased 20% this year, while oats have traded to a new record high, gaining 43% year to date, as Gro wrote about here.
Surging fertilizer prices could prolong food inflationary pressures into next year by boosting farm operating costs. For US corn farmers, for instance, fertilizer costs represent between 33% and 44% of total operating costs. Farmers could also respond by cutting fertilizer application rates, which could reduce yields, impacting crop production, animal feed costs, and consumer protein prices.
Join Gro on November 18 to learn how to get an early read on key supply and demand measures that determine future prices. Our webinar, “Building Global Balance Sheets for Corn, Soy, and Wheat,” will run through the metrics that drive supply and demand and introduce Gro’s automated Global Balance Sheets that provide a data-driven, objective view of market movements.