Price of Food Up – and Down
Improved farm production has sent prices in the grocery store downward, but restaurants have yet to pass the savings onto the customers, said Theodore Cangero, senior research analyst at the American Institute for Economic Research. The improving economy has more people out shopping, and they tend to get hungry, he said. Restaurants can afford to raise prices, he said.
Meanwhile, the fluctuations at supermarkets have more to do with the supply-and-demand dynamics of the commodities there, he said.
Restaurant prices increased 0.4 percent in November, but prices for food consumed at home fell 0.2 percent, according to an analysis of federal data by the AIER for its monthly Everyday Price Index report, released on Thursday. The EPI starts with Consumer Price Index data, then takes out the fixed elements like housing prices, as well as occasional expenditures like medical care, to develop a snapshot of the cost of living. For November, the EPI was down 1.2 percent as energy prices moved lower.
On balance, food prices were unchanged as restaurant prices went up, and supermarket prices went down. At the store, prices of pork and citrus fruit have seen runups in recent months because of a pig sickness and crop blight. But recent successes in combatting both drove down citrus and pork prices considerably over the month, Cangero said.
Bumper crops have driven down prices of fresh fruit and vegetables, especially potatoes. Rice and pasta prices were down over the month, as was milk, while cheese prices have been steady. Beef, poultry and fish saw small increases.
Restaurants, on the other hand, know their customers have more money in their pockets and have adjusted accordingly, Cangero said.
“They don’t have to cut prices to get people in the door,” he said.