A World Bank report of August 16, 2023 paints a heartwarming picture of falling food prices. But there is a caveat: the global consumer price index is still way higher than it was in 2020 before the COVID-19 pandemic.

In comparison with the 2015 to 2019 period, the 2023 prices are still 50% higher. This is partly due to the sudden disruption of global supplies by the pandemic.

The drop in prices of grains and the good promise from the newly planted August 2023 crops have, nevertheless, brought respite to consumers.

Low-priced oils and pellet meals have also eased some of the expense of buying pricey vegetables. This impressive drop is happening in the face of inflation and Ukraine war’s toll on grain supply. 

The U.S. CPI higher, PPI lower

The Consumer Price Index (CPI) survey shows that prices of food in the U.S. increased by 5.7% in June 2023 in comparison to June 2022. From May to June 2023, the prices rose by 0.3%. They then increased by 0.1% in the May-June period.

The reason for the rise in June was inflation, which rose by 3% from that of May, 2023.

2022 registered the highest annual increase in food prices in the United States since 1979, at 13.5% over the equivalent in 2021.

The Producer Price Index (PPI), however, has shown significant drops in the cost of some foods at wholesale markets.

By July 2023, five PPI segments (grains, oils, eggs, dairy and grains) had fallen, while those in other segments (pork, live animals, beef) had increased.

Wheat at the farm gate cost less by 3.9% in June 2023 than in May 2023 and declined by 31.5% from the prices of June 2022.

Milk price at the farm gate in the United States fell by 34% in June 2023 from that of June 2022. Soybean prices at the producer level fell by 20% between June 2022 and 2023.

Like their global equivalents, wholesale cooking oils declined in June 2023. They were down by 28.3% in comparison with June 2022. 

The cost of American eggs at the farm gate increased by 48% in June 2023, above the June 2022 equivalent. 

Thus, as prices of some food commodities continue to drop, those of others are still beyond reach.