Food Costs

Average wholesale food prices registered a significant decline in December, 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 1.9% between November and December. That represented the largest monthly decline since March (-2.3%).

The food price index was uneven in recent months, alternating between gains and declines during the second half of 2025. The net result was a modest decline for the year, with the food price index dipping 0.5% below its year-ago level in December.

That provided a bit of relief for restaurant operators, as the price index began 2025 with a nearly 10% increase on a 12-month basis.   

Even with the sharp decline in December, wholesale food prices remain well above their pre-pandemic levels. As of December 2025, the Producer Price Index for All Foods stood 34% above its February 2020 reading.   

The overall food price index moderated somewhat during 2025, but trends were mixed on the individual commodity level.

Producer prices for coffee (24.9%), unprocessed finfish (17.3%), beef and veal (10.7%), soft drinks (3.8%), unprocessed shellfish (2.5%), tea (2.5%), fats and oils (2.4%) and pork (2.0%) stood above their December 2024 levels. 

At the same time, there was pricing relief for several commodities in recent months. The price indices for eggs (-53.2%), butter (-41.2%), fresh fruit (-12.2%), confectionary materials (-11.1%), refined sugar (-8.6%), milled rice (-7.4%), cheese (-5.5%), milk (-5.1%) and wheat flour (-3.6%) were down from year-ago levels.

While average food costs leveled off somewhat in 2025, the degree to which restaurants are experiencing pricing relief depends on the menu mix of each individual operation.