Food inflation sticks around, as egg prices shoot back up again
08/15/2024 01:24
The pace of food inflation has moderated, but groceries and eating out remain pricy compared to pre-pandemic.
Some not so egg-cellent news out of this month's CPI inflation report.
In the month of July, the cost of groceries jumped 1.1% compared to a year ago, per the latest data from the Bureau of Labor Statistics. It's up 0.3% compared to June. The price of eggs, up 19.1% year over year and 5.7% month over month, contributed to the stubbornly high food prices.
The 12-month change in egg prices is the largest since April 2023, when the cost jumped 21.4% year-over-year. The average price for a dozen, large Grade A eggs went from $2.72 in June, to $3.08 in July. A dozen eggs cost $2.52 at the start of 2024.
Premium egg producer Pete & Gerry's CEO Tom Flocco told Yahoo Finance the price is affected by supply demand dynamics, as avian flu outbreaks crimped supplies. He noted it's not the case for the premium category, where hens are spread out and free-range.
The largest input cost is grain, he added, which includes corn, soybeans, and nutrients. It could account for upwards of 50% of the price for a dozen eggs. Other factors include contracts with farmers, transportation, and the cost of labor, which has been elevated over the last 18-24 months.
BLS economist Steve Reed called food at home costs overall a "mixed bag" as it’s consistently volatile.
Two other grocery items jumped out: bacon and frozen non-carbonated juices and drinks.
Bacon saw the largest yearly increase since July 2022, up 8.5%, while frozen non-carbonated juices and drinks are up 19.2% year over year.
Coca Cola (KO) recently told Yahoo Finance that inflation drove prices higher last quarter. Overall, its unit case volume jumped 2%, while pricing was up 9%.
Some good news, fresh fish and seafood saw its biggest monthly decline ever, down 2.4%. On a yearly basis, it was down 2.1%.
Food away from home, aka dining out, brought overall food inflation higher, up 4.1% year-over-year and up 0.2% from June to July.
Limited service meals (like fast food) saw the largest jump, up 4.1%.
Major players like McDonald's (MCD), Taco Bell (YUM), Burger King (QSR), and KFC, have introduced value promotions this summer, as consumers push back against pricier burgers.
Average restaurant spend at quick-service restaurants, excluding pizza, fell 1.4% year over year in June, and 2.9% in July, per a note from Bank of America analyst Sara Senatore, based on credit and debit card data.
Full service meals saw a 3.8% year over year bump in cost.
"It's a value war," Dine Brands Global (DIN) CEO John Peyton told Yahoo Finance. "It's a fight for share of wallet."
Overall inflation remained steady, up 2.9% from a year ago, with food up 2.2% year-over-year and up 0.3% on a monthly basis.
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].