John Gibbons of PetBusinessProfessor.com, who compiles and analyzes “petflation” knowledge from the U.S. Bureau of Labor Statistics (BLS), has famous in his newest December 2023 report that the YOY pet meals producer worth index (PPI) was down from the earlier month, however nonetheless up in comparison with 2022.
In December, pet meals costs got here in at +5.1%, down barely in comparison with November’s variety of +5.6%. Nationwide inflation has slowed significantly since June 2022, however pet meals costs continued to extend till June 2023. Pet meals costs handed the nationwide Shopper Worth Index (CPI) in July 2022, and at 5.1% in December, it’s nonetheless 50% above the nationwide price of three.4%, mentioned Gibbons.
When evaluating pet meals costs to the CPI from two years in the past (December 2021), CPI was +8.5% and pet meals costs had been +4.5%, which means pet meals costs are barely up greater than two years in the past. Gibbons famous pet meals costs have been above the CPI since November 2022.
2021 in comparison with 2023
- U.S. CPI – The inflation price was under 2% by 2020. It turned up in January 2021 and continued to develop till flattening out in Jul>Dec 2022. Costs turned up Jan>Sep, then dipped in Oct>Dec, however 35% of the 19.4% enhance within the 48 months since December 2019 occurred in the 6 months from January>June 2022 – 12.5% of the time.
- Pet meals – Costs had been at or under Dec 2019 ranges from Apr 20>Sep 2021. They turned up and grew, peaking in Could 2023. In Jun>Aug they dipped, grew Sep>Nov, then fell in December. For pet meals, 93% of the 23% enhance has occurred since 2022.
YOY — 2022 in comparison with 2023
- U.S. CPI– Costs are -0.1% from November. The YOY enhance is 3.4%, up from 3.1%. It peaked at +9.1% in June 2022.
“The focused inflation price is <2% so we’re nonetheless 55% greater than the goal,” defined Gibbons. “After 12 straight declines, we had two lifts, a secure month, two consecutive drops, now one other carry – not excellent news!”
The present price is 48% under 21>22 however the 21>23 price continues to be 10%; that is 51.5% of the overall inflation since 2019, however down from 54% final month. - Pet meals– Costs are -0.1% vs November and +5.1% vs December 2022, down from 5.6%.
“[Pet food prices], nonetheless, are nonetheless 3.9 occasions the Meals at Residence inflation price,” mentioned Gibbons. “The YOY enhance of 5.1% is being measured in opposition to a time when costs had been 17% above the 2019 stage, however that enhance continues to be 1.5 occasions the prepandemic 3.4% enhance from 2018 to 2019.”
The 2021>2023 inflation surge has generated 91.3% of the overall 23% inflation since 2019.
Inflation is cumulative
“Petflation is slowing, however it’s nonetheless robust, with the fourth highest price for December and the second highest annual price in historical past,” mentioned Gibbons. “It’s also double the CPI. In 2021, it was solely half that price.”
Gibbons mentioned even when pet meals costs slows to 0%, you’ll be able to’t ignore the truth that inflation is cumulative. “Pet costs are 17.7% above 2021 and 22.2% greater than 2019,” he defined. “These are large lifts. Since worth/worth is the most important driver in shopper spending, it is prone to have an effect on the pet business.”
Gibbons mentioned with greater pet meals costs persevering with, shoppers might make a transfer to on-line buying, swap to non-public label and even downgrade the standard of meals.
