The Consumer Price Index (CPI), collected and published by the U.S. Bureau of Labor Statistics (BLS), measures price levels for a basket of consumer goods and services. The CPI is the most publicized and widely used measure of consumer price inflation in the U.S. economy. The CPI for food is the component of the all-items CPI measuring changes in U.S. retail food prices. Industry analysts, food market participants, and policymakers closely follow the CPI for food.
The Producer Price Index (PPI), another BLS index, measures changes in prices at earlier stages of production—prices paid to domestic producers for their output. Data are collected for nearly every industry in the goods-producing sector of the economy, but the indexes for farm products and processed foodstuffs and feedstuffs are particularly relevant to food markets.
The U.S. Department of Agriculture, Economic Research Service (USDA, ERS) uses CPI and PPI price data in a variety of data products and publications. USDA, ERS tracks CPI and PPI food category prices and publishes price forecasts in the Food Price Outlook. These forecasts can help industry analysts project future costs and demand, inform consumers of possible changes to their food expenditures, and provide important signals to policymakers. Forecasting estimates for farm and wholesale groups are also important when evaluating farm and wholesale food prices.
At USDA, ERS, the CPI and PPI for food are published monthly and include:
- Reporting the current index levels for retail food and for farm-level, wholesale-level, and stage-of-processing foodstuffs and feedstuffs,
- Examining changes in the CPI for retail food and in the PPI for farm- and wholesale-level food, and
- Constructing forecasts of the CPI for retail food and the PPI for farm- and wholesale-level food up to 18 months in the future.