Food Costs

Wholesale food prices rose for the third consecutive month in July, 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 – increased 0.8% between June and July.

July was the strongest of three consecutive monthly increases in the food price index, after posting somewhat smaller gains in May (0.4%) and June (0.2%). The recent gains followed sharp declines in both March (-2.3%) and April (-1.5%), which had provided a brief respite from the upward trend in food costs.  

It’s important to note that the impact of tariffs will not be directly reflected in the Producer Price Index for All Foods, as it measures the prices paid to domestic producers. Prices of some processed foods may be impacted, however, if domestic producers rely on imported food items for their production. 

It’s also possible that some domestic producers choose to raise the prices of their food items, if competing items from other countries are more expensive due to tariffs. But overall, this food price index will not be a direct measure of the extent to which rising tariffs are impacting wholesale food prices in the U.S.

Driven by the uptick in recent months, the food price index stood 4.9% above year-ago levels. That was down from the strong 9.7% increase during the 12 months ending in February, but it marks the continuation of a period of elevated food costs that continues to impact the bottom line.

Wholesale food prices also continue to soar well above their pre-pandemic levels. As of July 2025, the Producer Price Index for All Foods stood 37% above its February 2020 reading.   

The overall food price index stood nearly 5% above year-ago levels, but trends were a mixed bag on the individual commodity level.

Producer prices for unprocessed finfish (31.9%), coffee (29.2%), eggs (25.3%), fresh vegetables (20.9%), beef and veal (9.9%), confectionary materials (9.0%), pork (4.7%), poultry (4.3%) and unprocessed shellfish (4.1%) stood above their July 2024 levels. 

At the same time, there was a degree of pricing relief for some commodities in recent months. The price indices for butter (-18.1%), refined sugar (-6.5%), fresh fruit (-5.3%), wheat flour (-2.3%), cheese (-1.9%) and milk (-1.5%) were down from year-ago levels.

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