miniseries
The March consumer price index report showed that core interest rates increased by 3.6% annually, in line with economists’ expectations. Inflation fell from 3.8% in March.
High-profile food categories rise The annual growth was 2.2%, of which out-of-home food increased by 4.1% monthly, while home food only grew by 1.1%. These prices are adjusted based on package or container size to accommodate a trend among food industry companies to offer less product per package. Although the overall level of food prices is still significantly higher than two or three years ago, the domestic food inflation rate has been below the Federal Reserve’s overall target level of 2% for seven consecutive months.
Categories with significant year-on-year inflation slowdown or decline include bread (+0.4% year-on-year), breakfast cereals (+0.6%), rice (-1.0%), eggs (-9.0%), ham (-3.4%), milk (-1.2%), apples (-12.7%) and coffee (-2.0%). Lower shipping and transportation costs in the United States are factors slowing inflation in some food categories. Consumer resistance to pricing and package sizes also affects demand for certain foods. Categories where prices remain above core inflation include infant formula (+5.1%), raw ground beef (+6.0%), cream (+3.5%), sugar (+4.3%) and candy/gum (+4.0% ).
Packaged food stocks with strong year-to-date returns so far include Lifeway Foods (LWAY) +82, WK Kellogg (KLG) +61%, Whole Earth Brands (FREE) +41%, BRC Inc. (BRCC) +39%, Pilgrim’s Pride (PPC) +39%, Post Holdings (POST) +20%, Lancaster Colony (LANC) +17%, Kellogg (K) +12%, Hormel (HRL) +11%, Conagra Brands (CAG) +9 %, and General Mills (NYSE:GIS) +8%.
Year-to-date laggards in the food sector include Hain Celestial (HAIN) -30%, Lamb Weston (LW) -21%, B&G Foods (BGS) -19% and Beyond Meat (BYND) -10%.
