CPI read: Food inflation steps up in September as eggs, butter, and beef prices jump

The Consumer Price Index report for September indicated a 3.3% year-over-year increase in the core rate to outpace the +3.2% inflation pace expected by economists and the +3.2% level seen in August.

The closely watched food category was up 2.3% year-over-year in September, with food away from home up 3.9% Y/Y during the month and food at home up 1.3% Y/Y. The pace of food inflation stepped up from the +2.1% mark seen in August. The overall level of food prices is even more elevated in comparison to two and three years ago.

Categories showing only modest or declining inflation included cereal (-0.6% Y/Y), bread (-0.8%), cheese (-0.5%), soups (+0.6%), lunch meats (+0.5%), and coffee (-1.0%). A lower level of transportation and shipping costs in the U.S. has been a factor in the moderating inflation for certain food groups. Consumer pushback on pricing and packaging sizes has also impacted demand for certain food items. Notably, private label brands at lower prices have also increased in popularity. Categories with prices still on the rise above the core inflation rate, included butter (+7.8%) uncooked beef (+4.7%), and eggs (+39.6%) amid serious bird flu challenges in the poultry industry.

Food and beverage watch: Kroger (KR), Albertsons (ACI), Walmart (WMT), Kraft Heinz (KHC), General Mills (GIS), Kellanova (K), Tyson Foods (TSN), Hormel (HRL), Conagra Brands (CAG), Campbell Soup (CPB), J.M. Smucker (SJM), Pilgrim’s Pride (PPC), Lamb Weston (LW), Ingredion (INGR), BellRing Brands (BRBR), BRF (BRFS), Cal-Maine Foods (CALM), Post Holdings (POST), Lancaster Colony (LANC), Flower Foods (FLO), J&J Snack Foods (JJSF), Simply Good Foods (SMPL), Treehouse Foods (THS), Coca-Cola (KO), PepsiCo (PEP), Keurig Dr Pepper (KDP), Monster Beverage (MNST), Celsius Holdings (CELH), Anheuser-Busch InBev (BUD), and Molson Coors (TAP).