Monthly growth in food prices accelerated slightly in January, reversing a gradual decline seen in recent months, as the price of eggs, cookies and citrus fruits all rose.
Food prices grew 0.5 over the month, ticking up slightly compared with an increase of 0.4 percent in December. A price index for meats, poultry, fish and eggs increased in January, as did another for cereals and bakery products. An overall index for fruits and vegetables fell from the previous month, while an index for dairy products was unchanged.
The price of eggs was up 8.5 percent from the previous month, the Bureau of Labor Statistics said, as an outbreak of avian influenza around the United States continues to cause egg prices to surge. However, other measures, like a market report compiled by the Agriculture Department, show that the price of eggs has been dropping sharply in recent months. The average price of large eggs dropped from more than $5 a carton earlier this year to less than $3 in February, the department said.
On an annual basis, the food index was up 10.1 percent. The price of food at restaurants rose 0.6 percent from the previous month, outpacing 0.4 percent monthly growth in the price of groceries.
Rising food prices have been one of the most painful and visible aspects of inflation for many households, which have had to cut back on purchasing pricier items at the grocery store.
Tyson Food Inc. reported earlier this month that its profits fell in the first quarter as consumers cut back on purchasing its products, especially more expensive items like beef and pork. And Unilever, which makes Dove soap and Hellman’s mayonnaise, has said that it will need to continue raising prices this year to pass on its own increasing costs to consumers.
Coca-Cola on Tuesday reported that it raised prices by 12 percent in the fourth quarter, versus the same period a year earlier, and the volume of cases it sold fell by only 1 percent. It has been a similar story at other consumer-facing companies like Pepsi, with double-digit percentage price increases more than offsetting declines in the number of soda cans, ice cream tubs and bags of chips bought by shoppers.
Executives at these companies have told investors to expect more modest revenue growth this year, as inflation moderates. But companies tend to be reluctant to cut prices, which dents profit margins, so they could keep them high, especially if consumers show a willingness to keep spending.
“There will be price increases across the world in 2023,” James Quincey, Coca-Cola’s chief executive, told analysts on a call on Tuesday.
But key costs for farmers like fuel and transportation have retreated from highs last year, helping to lessen some of the price pressures in the food sector. A food price index created by the United Nations declined for its tenth consecutive month in January, after reaching an all-time high last March.
Still, food prices remain uncomfortably high for many consumers, especially lower-income people who spend a greater share of their money on food. Many parts of the Western United States continue to experience extreme drought, which has reduced supplies and pushed up prices for products like alfalfa hay, an important feed for livestock and dairy cows.