Food Costs

Wholesale food prices resumed their upward trend in May, according to preliminary data from the Bureau of Labor Statistics. The Producer Price Index for All Foods – which represents the change in average prices paid to domestic producers for their output – rose 0.5% between April and May.

May’s moderate increase came on the heels of sharp declines in both March (-2.3%) and April (-1.5%), which had given many restaurant operators a temporary reprieve from the recent resurgence of food inflation.  

Prior to the March and April declines, the food price index had risen in 10 of the last 13 months – and 8 of those 10 monthly gains were at least 0.5%.

The resumption of growth in May pushed average wholesale food prices 5.8% above their year-ago level. While that was down somewhat from the strong 9.9% increase during the 12 months ending in February, it extends the period of elevated food costs that continue to impact restaurant profitability.

Zooming out, wholesale food prices also remain well above their pre-pandemic levels. As of May 2025, the Producer Price Index for All Foods stood 35% above its February 2020 reading.   

While the overall food price index remains well above year-ago levels, trends were mixed on the individual commodity level.

Producer prices for eggs (137.4%), coffee (32.5%), confectionary materials (21.6%), beef and veal (10.1%), poultry (3.6%), unprocessed finfish (3.5%) and cheese (1.0%) stood above their May 2024 levels. 

At the same time, there was a degree of pricing relief for some commodities in recent months. The price indices for fresh vegetables (-27.8%), butter (-22.1%), refined sugar (-6.5%), wheat flour (-6.3%), unprocessed shellfish (-5.9%), milled rice (-5.2%) and pork (-1.7%) were down from year-ago levels.

While food costs remain a headwind overall, the degree to which restaurants are experiencing any pricing relief depends on the menu mix of each individual operation.