Good News for Consumers on Inflation
June 12, 2023
When dairy prices rise, people notice.
That’s what happens when your product is so ubiquitous that grocery stores price it below-cost to bring in consumers who make up for the loss by buying higher-margin items. That’s what happens when your products are so essential that there’s no way around spending a premium if that’s what it takes to bake a perfect cake. And that’s what happens when people rely on you for affordable, efficient nutrition.
But in recent months, even as last year’s general run-up in inflation has eased, some of that easing has been even more pronounced in dairy products. Butter prices, which in December were 31 percent higher than a year earlier, are now only up 5 percent year-over-year, according to the latest Consumer Price Index numbers – much more in line with overall inflation. Cheese was up 13.5 percent last August – but by April it has fallen to 6.1 percent, less than overall food inflation of 7.5 percent.
And fluid milk, which last August was witnessing year-over-year inflation of 17 percent, in April was up a meager 1.6 percent over the year before, a number that, given all that’s occurred, seems positively … normal.
Which shouldn’t be surprising in the end. While dairy, like many perishable products, is prone to more dramatic price swings than many other goods, over the long haul it remains extremely affordable, and has only become more so over time. Check out the divergence seen from 2008, when long-term overall inflation, food inflation and dairy inflation were relatively equal, through today, as dairy prices have risen less, during most of that period, relative to those other categories.
The best bargain in nutrition is only getting better. And while short-term blips get headlines, as the spikes recede, all that remains is dairy’s well-deserved reputation for quality and affordability. Something to keep in mind as the summer months heat up – dairy will cool you down, from your body to your pocketbook.