Wednesday, July 20, 2011

More on Food Inflation

Earlier today, I noted that fundamental supply and demand issues are keeping food prices high. That got me thinking about the actual price index of some food groups, so I want to the St. Louis Fed and found these charts:

The YOY percentage change in cereals and grains has been pretty steady for the last 20 years except for a massive spike right before the last recession. Also note that the YOY change is now increasing pretty sharply.

We've also seen a pretty big increase in sugar prices over the last few years, with is also reflected in the above chart. Notice that sugar prices spiked during the last recession.

Meat, poultry and fish increases have actually been pretty steady for the last 30 years. But notice that current increases are near the top of the YOY range for the last 30 years as well.

While energy prices get all the headlines, increases in food inflation are also causing problems for consumers.