FMI warns grocery prices may face renewed pressure from supply chain
FMI's Andy Harig wrote that food-at-home inflation was unchanged in August, but he cautioned that upstream supply-chain pressures could make grocery prices less stable. He discussed the latest CPI and PPI with Dr. Ricky Volpe, along with trade's role in year-round food availability and field corn as a possible retail price indicator.
FMI's Andy Harig highlighted that August food-at-home inflation was unchanged month over month, with the annual rate easing to 2.2% from 2.7%. Overall inflation, by contrast, rose 0.4% for the month and 3.4% year over year. Dr. Ricky Volpe noted that produce prices fell while poultry, dairy, fats, oils and butter rose, so individual shopping baskets may have felt different.
Volpe also pointed to upstream Producer Price Index increases in crude oil, diesel, industrial electricity, warehousing, cold storage and trucking. Transportation costs can reach retailers within weeks, while storage, manufacturing and agricultural expenses take longer. Harig and Volpe discussed trade's role in year-round food availability and field corn as a possible retail price signal.
If upstream costs continue rising, grocery shoppers could face less predictable prices, even if average food-at-home inflation stays flat. Households with tight budgets may feel the most strain, especially if poultry, dairy and oils remain elevated while produce offers relief. Retailers and suppliers may need to manage thinner margins and volatile transportation, storage and energy expenses. Trade's role in year-round availability could also shape how quickly shortages or price swings reach consumers.