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Commodity Prices Have Limited Influence on U.S. Food Inflation

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Abstract

Food prices increased at the fastest pace in more than two decades from July 2021 to July 2022. We show that this increase has not been driven by commodity prices but by an increase in consumer spending on food at home and increases in costs along the supply chain. Our results suggest that food inflation could ease if consumers shift more purchases back to food service establishments and if costs in food processing and marketing abate. Conversely, food inflation could remain high if broader measures of inflation persist.

Suggested Citation

  • Cortney Cowley & Francisco Scott, 2022. "Commodity Prices Have Limited Influence on U.S. Food Inflation," Economic Bulletin, Federal Reserve Bank of Kansas City, issue September, pages 1-4, September.
    • Handle: RePEc:fip:fedkeb:94818
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    References listed on IDEAS

    as
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    2. Okrent, Abigail M. & Elitzak, Howard & Park, Timothy & Rehkamp, Sarah, 2018. "Measuring the Value of the U.S. Food System: Revisions to the Food Expenditure Series," Technical Bulletins 277568, United States Department of Agriculture, Economic Research Service.
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    More about this item

    Keywords

    Prices; Consumers' expenditure; Inflation (Finance);
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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