Though ingredient prices have fallen recently, product prices remain high, CNN Business reports. This is partially due to food producers’ other expenses, including labor and transportation, which remain elevated compared to before the pandemic.
Experts note that now that Americans have shown a willingness to pay more, manufacturers aren't necessarily in a rush to give up profits, according to the report.
“When costs change, especially when costs change in a very publicized way,” companies can use the moment to raise prices, said Jean-Pierre Dubé, a marketing professor at the University of Chicago Booth School of Business. “Companies view these as occasional opportunities, and they don’t want to miss out.”
Between January 2022 and January 2023, groceries increased in price by 11.3 percent. Since its peak in May, however, agricultural commodity prices are down, according to the USDA. A Rabobank report also showed that this downward trend has persisted into 2023 with wheat, coffee, and cocoa commodity prices falling in the last week of February. Full Story
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