Food Costs

Wholesale food prices declined for the second consecutive month in April, 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 – fell 1.5% between March and April.

That followed a sharp 2.3% drop in March – the largest single-month decline since February 2023 (-3.0%). 

The last 2 months offered restaurant operators a respite from the reemergence of food inflation that surfaced in 2024. 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%.

Despite the sizable declines during the last 2 months, average wholesale food prices remained 4.7% above their year-ago level. While that was down from the robust 9.8% increase during the 12 months ending in February, this extended period of elevated food costs continues to pressure restaurant profitability.

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

While average wholesale food prices dipped during the last 2 months, several commodities remained well above their year-ago levels. Producer prices for eggs (50.0%), confectionary materials (26.6%), coffee (20.1%), unprocessed shellfish (9.2%), beef and veal (8.7%), pork (6.2%) and cheese (5.9%) stood above their April 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 (-23.4%), unprocessed finfish (-22.8%), butter (-20.0%), refined sugar (-6.8%), fats and oils (-5.2%), milled rice (-4.0%) and wheat flour (-2.5%) 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.