Practical Dad

PracticalDad Price Index, August 2014:  Food Inflation Picking Up Again

The pricing was done for the August 2014 PracticalDad Price Index and a review shows that while the cost of the 47 item grocery marketbasket declined slightly, from July's 110.20 to August's 110.14 (November 2010 = 100), the Food-Only Sub-index of 37 foodstuff items rose by almost a full half point, from July's 113.22 to August's 113.71 (November 2010 = 100).  The upshot is that, when you consider the 37 foodstuff items alone, the cost of these has risen 13.71% since November 2010 and a full half percentage point in the course of a single month.

The foodstuffs (for a full listing of the PracticalDad Price Index marketbasket, see here) did not occur across the board however.  Produce and Dairy items decreased very slightly, but the rise was driven by a 2.6% increase in the price of meat - ground beef, hot dogs, eggs, tuna, cooked deli ham, chicken and fish sticks - from the previous month.  This is simply showing the retail effects of the supply issues in the economy as the national beef herds have decreased in size to levels not seen in 60 years and pork herds have been hit by PED, which has led to culling to control the disease.

One final comment on the results.  Over a year ago, I began to follow what I refer to as the spread and it's this which is the final column in the chart.  The idea behind the spread is to simply note the differential between the rise in food prices versus the non-food prices within the basket.  What is notable about this is that the food prices have again been increasing and the spread between the Full Index and the Food-Only Index is rising, showing how food costs are now outpacing and driving the basket.

The results for August and the previous three months follow.

 

PracticalDad Price Index - August 2014
Month Total Index Food-Only Index Spread
5/14 109.85 111.54 1.69
6/14 110.53 112.65 2.12
7/14 110.20 113.22 3.02
8/14 110.14 113.71 3.57

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