Here’s a dubious honor: Pet food is outpacing the overall U.S. economy, but not just in terms of growth; inflation in the U.S. pet food market is now higher than that of the Consumer Price Index (CPI). For June 2022, pet food inflation registered at 10.3% year-over-year (YOY), compared to 9.1% for the CPI.
That’s despite the fact that costs for dog and cat food manufacturers, as measured by the Producer Price Index (PPI), leveled off from May to June 2022, though the dog and cat food PPI was up 12.7% YOY in May, contributing to the rise in retail prices. This information comes courtesy of John Gibbons, who provided the latest “petflation” data on his PetBusinessProfessor.com blog, plus a PPI chart sent separately.
If it’s any consolation, pet food’s monthly increase in June was slightly less than that for the overall CPI. Pet food inflation grew 1.3% over May 2022 versus 1.4% for the CPI, according to Gibbons. Yet pet food inflation for May YOY was at 9.1% compared to 8.6% for the CPI, and that only compounded in June. It’s not a good thing when pet food inflation keeps hitting new highs, ones even past historic highs for the CPI. (Believe it or not, the CPI did not hit a record, but it is the highest it’s been in 40 years.)
Pet food inflation is also outpacing that for the pet care sector overall, which registered at 8.8% YOY in June. Besides pet food, another sub-sector driving that rate is pets and supplies (including other pet products), reaching 9.3% YOY in June.
Zooming out to longer periods, pet food actually fares better than some other sub-categories, as well as the total CPI, Gibbons’ analysis showed. He compared data year to date (YTD) through June versus the same period in 2021; pet food prices have risen 6.5% versus 7.1% for pet care overall, 7.4% for pets and supplies, and 8.3% for the CPI.
Because pet food actually experienced a deflationary period before this latest upheaval, it looks even better, relatively, when measured from June 2019 to present day: 7.6% versus 11.1% for total pet and 13.3% for the CPI. (Thanks to their even greater deflation in 2020 and 2021, pets and supplies’ prices have increased only 5.7% since June 2019.)
Pet food also registers more positively when compared to a similar category, “food at home” (human food). Though inflation for that increased only 1% from May to June 2022, it is still up 12.2% YOY, 10.2% YTD and a whopping 15.% since June 2019. Since everyone needs to eat, these price increases are among the ones hitting everyone’s wallets, with an even worse impact on people with lower incomes.
“That’s four straight months of double-digit YOY monthly percentage increases,” Gibbons commented. “These are the first 10+% increases since 1981.”
In addition, economists’ and government officials’ concerns over the latest inflation data stem not just from the 40-year-highs but also because of how many categories are affected, according to an article by Jeff Cox on CNBC.com.
Though he didn’t include pet food or pet care in his analysis, you can bet their inflation numbers are also a source of pain for many of the 90.5 million pet-owning households in the U.S. having to cope with these higher prices as part of their overall soaring food bill. This will likely lead to more pet owners trading down their pets’ food to lower-priced, less premium options.