July CPI

Between January 2021 and January 2023 the Consumer Price Index for food increased from 271.3 to 319.7 (where the 1981-1982 average equals 100). That was a precipitous increase (see chart below) caused by a sustained surge in demand for Food-At-Home during the pandemic.

Even as Food-Away-From-Home options reopened in Spring 2021, demand for groceries remained well above pre-pandemic patterns. During the second half of 2022, FAH demand returned to levels better matched with processing/manufacturing capacity. For most of 2023 food prices have retreated from the (economic and political) precipice.

This morning the Bureau of Labor Statistics reported a July CPI for Food-At-Home of 322.1. According to the BLS survey:

The food at home index increased 0.3 percent over the month, after being unchanged in June. Four of the six major grocery store food group indexes increased over the month. The index for meats, poultry, fish, and eggs rose 0.5 percent in July as the index for beef increased 2.4 percent. The fruits and vegetables index increased 0.4 percent over the month and the other food at home index rose 0.2 percent. The index for dairy and related products increased 0.5 percent in July after decreasing in each of the previous 4 months. The nonalcoholic beverages index and the cereals and bakery products index were both unchanged in July.

Food (and energy) can be volatile. Weather and other natural phenomena can complicate supply. The cost-structure of food is highly responsive to wages, fuel costs, and related freight costs. But given this potential volatility and actual constraints on supply, 2023 US food prices have — so far — been remarkably stable.