Food commodity prices fall to 2021 levels while consumer grocery bills remain elevated
Yahoo Finance markets reporter Ines Ferre joins the Live show to break down the latest food commodity prices while inflation in energy and wages continues to impact consumers' grocery bills.
INES FERRE: Agricultural commodities, those are down from what we saw those levels after the Russian invasion of Ukraine. Take a look at wheat futures. You will see a year-to-date here-- wheat futures relatively flat for the year. Oat futures are down 47% year-to-date. Even coffee futures are lower year-to-date, down 27%.
So what is happening here? Because people are not seeing these lower prices in commodities translate to their grocery bills. You've got food inflation that is up roughly 12% year-over-year. Well, food producers, they're hesitant to lower their prices because of uncertainty when it comes to grain-- often, that output, grains are planted for the following year.
So there's been a lot of turmoil with the situation with Ukraine. Also, the energy prices-- those are still relatively high, even though they have come off their highs. But energy is a big factor when it comes to food, especially when you're talking about farmers planting.
They use diesel, and diesel has not come off its prices as much as gasoline has from their highs from earlier this year. Farmers use diesel, and also transportation is in diesel as well. So a lot of this takes about 3 to six months to translate into grocery bills.
I did speak to a produce producer who was telling me that the prices at shipping points, those are down. But that doesn't reflect on the wholesale prices or supermarket prices also, because that takes time. There's a lag there as well, because you also have inventory at supermarkets that you need to clear out first before you bring in those other products, guys.