The average retail price of flour in the U.S. rose 5.3% in July, following a trend of higher grocery store product prices, according to the U.S. Bureau of Labor Statistics. Retail prices of wheat flour, white flour and all-purpose flour rose 7% from June and 44.8% from a year earlier.
Flour price increase
The Consumer Price Index (CPI) for Cereals and Cereals products increased 2 percent in July from June and 16.8 percent from July 2021. Indexes for this category include: Flour and ready-mix flour, up 4% from June and 22.7% from the previous year; Breakfast cereals, up 2% from the previous month and 16.4% from July 2021; Rice, Italian Noodles and cornmeal rose 1.3% from June and 14.5% from July 2021. The Bakery Products Price Index rose 2% in July from June and 14.2% from July 2021.
While consumer prices for wheat products continue to rise rapidly, this is not expected to have a significant impact on the use of wheat food. Demand for wheat is considered relatively price inelastic, and prices for many food categories have also risen significantly. Many times, when prices go up, people don’t stop buying food and opt for cheaper options.
Rising food costs are hitting stores, restaurants and homes hard. The CPI for baked goods and grain products rose 2 percent in July, the second straight monthly gain, according to the U.S. Department of Labor’s Bureau of Labor Statistics. The consumer price index (CPI-U) for all urban consumers was unchanged on a seasonally adjusted basis in July after rising 1.3% in June.
Grocery food prices increased
The remaining major grocery food categories increased from 9.3% (fruits and vegetables ) to 14.9% (dairy and related products). The non-local food index rose 7.6% from last year. Over the past 12 months, the full-meal service index rose 8.9%, and the limited-service meal index rose 7.2% from last year.
The current inflation rate is almost as high as last year as it was in the early 1980s. All items in the CPI rose 8.5% on a seasonally adjusted basis over the past 12 months.
The Household Foods Index rose 13.1% over the past 12 months, the largest gain in 12 months and an increase since the end of March 1979. For the year, the domestic other food index rose by 15.8%, and the cereals and bakery products index rose by 15.0%.
Reason Will flour prices go up?
Many analysts point to a number of factors driving up food costs. These include supply chain disruptions caused by the COVID-19 pandemic, high transportation costs, labor costs, and a surge in global wheat prices due to the war in Ukraine.
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