Food Costs

Average wholesale food prices ticked lower in August, 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 – declined 0.3% between July and August.

August’s modest decline followed three consecutive gains in wholesale food prices, the strongest of which was a 0.8% increase in July. Prior to that, the food price index had fallen sharply in both March (-2.3%) and April (-1.5%), which offered temporary relief from the reacceleration 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.

Despite the decline in August, the food price index remained 3.7% above year-ago levels. That was down from the strong 9.7% increase during the 12 months ending in February, and represented the smallest 12-month increase in more than a year.

Still, this represents the continuation of a period of elevated food costs, which will keep pressure on the bottom line of restaurants.

Wholesale food prices also remain well above their pre-pandemic levels. As of August 2025, the Producer Price Index for All Foods stood 36% above its February 2020 reading.   

The overall food price index was nearly 4% above year-ago levels, but trends were mixed on the individual commodity level.

Producer prices for unprocessed coffee (33.3%), unprocessed finfish (23.2%), beef and veal (21.1%), unprocessed shellfish (10.5%), poultry (8.9%), confectionary materials (8.7%) and pork (5.9%) stood well above their August 2024 levels. 

At the same time, there was a degree of pricing relief for some commodities in recent months. The price indices for eggs (-33.2%), butter (-22.7%), fresh fruit (-7.2%), refined sugar (-6.9%), fresh vegetables (-5.6%) and wheat flour (-3.5%) 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.