U.S. Wholesale Food Prices Trended Higher in Recent Months

The recent sharp runup in average wholesale food prices took a pause in October, according to preliminary data from the Bureau of Labor Statistics. The Producer Price Index for All Foods – which represents the change in average prices paid to domestic producers for their output – declined 1.1% between September and October.

October’s decline was the largest single-month drop since May 2023, which the price index fell 1.5%. It came on the heels of four consecutive strong monthly gains – and seven increases in the last eight months.  

The recent reacceleration of food prices was in sharp contrast to 2023, when the price index was flat to slightly lower. This afforded restaurant operators a degree of pricing relief after the decades-high growth rates of 2021 and 2022. 

Those pricing pressures quickly reemerged in 2024, with average wholesale food prices rising 4.5% above their year-ago level in October.

It also means average food prices remain well above pre-pandemic levels. As of October 2024, the Producer Price Index for All Foods stood 31% above its February 2020 reading.  

The recent upward pressure on wholesale food prices was broad-based across several commodities. Producer prices for eggs (99.6%), confectionary materials (26.7%), refined sugar (14.7%), coffee (14.5%), pork (12.4%), cheese (7.8%), unprocessed shellfish (7.3%), milk (4.8%) and beef and veal (4.2%) stood well above their October 2023 levels. 

The fresh vegetables index jumped 15.0% during the last 12 months, while the fresh fruits and melons index increased 7.8%.

Until wholesale prices start trending lower across a broad range of commodities, food costs will continue to be a headwind for many restaurants.