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Retail dairy prices showing double-digit inflation

A dairy economist says he’s following how substantial retail dairy price inflation impacts consumer buying trends.

Peter Vitaliano is with the National Milk Producers Federation.

“Dairy product consumption is pretty insensitive to prices but the kind of retail price inflation we’re looking at now is going to test that,” he says.

He tells Brownfield retail dairy inflation has been delayed compared to the general economy, only rising about three percent in January compared to 2021.

“But it has now ticked up rapidly and in August it was 16.2 percent,” he says.  “That is significant, that is double-digit inflation measured by the year over year growth.”

Vitaliano says dairy has always trended slower than general inflation and total food and beverage inflation. More cheese processing. increased export demand, and a tight milk supply this year have also created a retail price shift.

“The available milk has been channeled preferentially to cheese production, as a result, the price of cheese has not gone up as much both in wholesale and retail, whereas butter production has been kind of shorted,” he explains.

Food and beverage inflation was up almost 11 percent in August.