Food Costs

Wholesale food prices surged in February, climbing 3.5% from the previous month, according to preliminary data from the Bureau of Labor Statistics. This marks the second substantial increase in the past four months for the Producer Price Index for All Foods, which tracks changes in prices paid to domestic producers. The latest spike follows a modest 0.3% uptick in January.

Rising wholesale food costs continue to strain restaurant operators, with pricing pressures intensifying across the industry. Over the past 12 months, average wholesale food prices have surged 9.7%, up from 7.5% year-over-year in January—the steepest annual increase since January 2023.

Beyond the past year, food prices have climbed sharply in the post-pandemic era. As of February 2025, the Producer Price Index for All Foods was 39.8% higher than its February 2020 level, underscoring the persistent cost challenges facing the industry.   

Wholesale food prices surged across several key categories in February, with the most dramatic spike in chicken eggs (+53.6%). Other notable increases included pork products (+7.9%), fresh and dry vegetables (+6.0%), miscellaneous processed foods (+4.8%), fresh fruits and melons (+4.0%), and dry, condensed, and evaporated milk products (+2.7%).

However, some price declines helped offset these increases. For example, butter saw a notable drop (-5.1%), along with processed poultry (-2.5%), sugar and confectionery (-2.0%), soft drinks (-0.8%), coffee (-0.3%), and fats and oils (-0.2%).

On a year-over-year basis, chicken eggs experienced the largest wholesale price increase, skyrocketing 183.3%. Other notable annual gains included strawberries (+35.7%), prepared frozen shellfish (+28.2%), potatoes (+23.0%), fresh fruits and melons (+16.2%), coffee (+14.2%), pork (+10.4%), beef and veal products (+9.5%), sugar and confectionery (+9.4%), and turkeys (+9.0%).

Conversely, some food categories saw price declines over the past 12 months. Fresh and dry vegetables prices fell 16.3% since February 2024, for instance, followed by notable declines for butter (-10.2%), fats and oils (-3.1%), canned vegetables and juices (-2.5%), flour (-1.3%), cereal and bakery products (-0.5%), and fresh fruits and vegetables (-0.4%).

Until wholesale prices start trending lower across a broad range of commodities, food costs will continue to be a headwind for many restaurants.