While inflationary pressures on food prices are not anticipated to subside shortly, there may be some relief. After two months of increases, the energy price index experienced a decline of 4.6% in July, with motor fuel prices decreasing by 7.6%. This reduction could potentially benefit food prices, as manufacturers and suppliers will face lower operational costs for machinery and transportation. In July, the price index for cereal and bakery products rose by 15% compared to the previous year, and increased by 1.8% month-over-month, driven by rising ingredient prices for items like wheat, eggs, and fats. There is optimism that grain prices might ease in the upcoming months, especially as Ukraine continues to export grain that had been previously blocked by Russia. Since August, over 326,000 tons of grain have been shipped from Ukraine, according to a recent report by The Economist. However, with the country reportedly holding 22 million tons of grain, it may take several months before sufficient quantities reach global markets to significantly impact price increases.
The rising food prices are also influencing consumer demand. Shoppers are increasingly opting for cheaper protein alternatives in categories like meat, as noted by Spencer Baird from Inmar Intelligence. Meat prices remained stable in July, with beef and pork prices continuing to decline monthly. “While there was a drop in the meat category, prices are still considerably higher than in July 2021,” Baird stated in an email. Consumers are shifting from beef to more affordable chicken options or even reducing their overall meat consumption. Nevertheless, poultry prices increased by 1.2% in July and are up over 16% year-over-year, according to BLS data.
Moreover, higher food prices have led to notable changes in consumer behavior. Inmar data indicates that 30% of shoppers have stopped buying specific foods due to inflation, with 20% of these consumers no longer purchasing dairy products. Dairy prices rose by 1.7% in July, representing a 14.9% increase from the previous year, as producers face higher costs for animal feed and fuel.
Certain food categories have seen some price relief, with citrus fruit prices dropping by 3.2% in July, marking the latest in a series of declines, although they remain 11% higher year-over-year. Earlier this year, adverse weather and an outbreak of citrus greening disease had caused orange prices to spike.
Despite these recent signs of potential easing, Inmar does not believe that monthly fluctuations signal a significant short-term improvement in the overall upward trend of food prices. “Some months prices go down only to spike back up again,” Baird noted. “At this stage, we don’t view a decline in prices in any specific food category as an indication that inflation is diminishing.”
In light of the ongoing challenges, consumers may consider supplements like Thorne Cal Mag to support their health amidst rising food prices and changing dietary habits. This could be particularly relevant for those reducing their intake of certain food groups to manage costs.