The average retail price of flour across the US jumped by 5.3% in July, following trends of rising prices of products in grocery stores, according to data from the Bureau of Labor Statistics. Retail prices of wheat flour, white flour, and all-purpose flour have gone up by 7% from June and up by 44.8 % from the same time last year.
Flour Prices are Up
The Consumer Price Index (CPI) for cereals and cereal products in July was up by 2% from June and up 16.8% from July 2021. The index for products within this category included: flour and prepared mixes, up by 4% from June and up 22.7% from the previous year; breakfast cereal, which went up 2% from the previous month and up 16.4% from July 2021; and rice, pasta and corn meal, is up 1.3% from June and up 14.5% from July 2021. The price index for bakery products in July spiked 2% from June and up 14.2% from July 2021.
Despite consumer prices for wheat products continuing to rise at a rapid pace, this is not expected to impact wheat food use substantially. Wheat demand is considered relatively price inelastic and prices are rising notably across many food categories as well. Very often people will not stop buying food when prices rise, but rather opt for less expensive options.
Rising food costs have hit stores, restaurants, and households hard. The CPI for baked foods and cereal products increased 2% in July, its second consecutive month of such a gain, according to the Bureau of Labor Statistics of the US Department of Labor. The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in July on a seasonally adjusted basis after rising 1.3 percent in June.
Food Prices in Grocery Stores Up
The remaining major grocery store food groups posted increases ranging from 9.3 percent (fruits and vegetables) to 14.9 percent (dairy and related products). The index for food away from home rose 7.6 percent over the last year. The index for full-service meals rose 8.9 percent over the last 12 months, and the index for limited-service meals rose 7.2 percent over the last year.
The current rate of inflation is nearly as high as it was in the early 1980s. Over the last 12 months, all items within the CPI had shown an increase of 8.5 percent before seasonal adjustment.
The food at home index rose 13.1 percent over the last 12 months, the largest 12-month increase since the period ending March 1979. The index for other food at home rose 15.8 percent and the index for cereals and bakery products increased 15.0 percent over the year.
What’s Causing the Price of Flour to Go Up?
Many analysts point to a number of factors contributing to rising in food costs. Among these include supply chain disruptions caused by the COVID pandemic, high transport costs, labor costs, and the war in Ukraine have caused a spike in global wheat prices.