John Gibbons, of PetBusinessProfessor.com, shared insights on how prices rose 0.7%, but the year over year (YOY) consumer price index only increased by 0.1% in his January 2025 report. This is due to the Dec 23 >Jan 24 lift being +0.5%.
Also, despite a 0.4% lift in prices, ‘petflation’ stayed stable at 2.0% because the Dec 23>Jan 24 price increase was +0.4%.
According to Gibbons, pet food prices rose 0.5% and still deflating, but the rate of deflation has slowed.
“The ‘petflation’ recovery paused in August, came back Sep>Oct, paused in November, then resumed in Dec>Jan,” said Gibbons. “At 2.0%, January was 35.5% below the 27-year 97>24 average. We tend to focus on the monthly inflation in the current year and forget that what happened last year is a big factor in determining inflation.”
Pet prices are 23.3% above 2021 and 28.6% higher than 2019.
Gibbons’ states that some pet parents may downgrade their pet food. But the biggest impact in the pet product segment will be a strong movement to online purchasing and private label.
2022 compared to 2024
- U.S. CPI – The inflation rate was below 2% through 2020. It turned up in January 21 and continued to grow until flattening out in Jul>Dec 22. Prices rose Jan>Sep 23, fell Oct>Dec, rose Jan>Oct 24, fell Nov, then rose Dec>Jan to a record high but 28.8% of the increase since Dec 19 happened from Jan>Jun 22 – 10% of the time.
- Pet food – Prices were at the Dec 19 level from Apr 20>Sep 21. They grew & peaked May 23. Jun>Aug ↓, Sep>Nov↑, Dec>Feb↓, Mar↑, Apr>May↓, June↑, Jul>Oct↓, Nov↑, Dec↓, Jan↑. 99% of the lift was in 22/23.
YOY -- 2022 compared to 2024
- U.S. CPI – Prices are +0.7% from Dec. The YOY increase is 3.0%, up from 2.9%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are now 50+% higher than the target. The January increase was the 4th straight lift after 6 consecutive drops from Apr>Sep. The current rate is below 23>24 but the 21>25 rate is still +21.4%, 81.7% of the total inflation since 2019. The Inflation surge hadn’t started in January 2021, +1.4%
- Pet food – Prices are +0.5% vs Dec. but -1.1% vs Jan 24, up from -1.7%. They are still far below the Food at Home inflation rate of +1.9%. The YOY drop of -1.1% is being measured against a time when prices were 20.0% above the 2019 level but the current decrease is still more than double the -0.5% drop from 2020 to 2021. The 2021>2025 inflation surge generated 90% of the 25.1% inflation since 2019. Inflation began in June 2021.
Update: Pet food producer price index (PPI)
The Retail Price changes usually mirror the Dog/Cat PPI but lag slightly. They peaked in May 23, then. then got on a rollercoaster. They rose 0.5% in January. There was a +0.9% Dog/Cat PPI lift in Feb, +0.1% in Oct and now +0.2% in Jan 25 to a new record high. In the Other Pet Food PPI, prices rose in January from the adjusted December number but are still deflating vs last year. Dog and cat food prices only increased 0.84% since March 2023, showing 21 months of stability.
Pet Food Retail CPI is -1.1% from January 2024, and 0.5% versus December 2024. The “Other pet food” category is -7.8% from January 2024.
