Pet food inflation lingers but is decelerating, according to John Gibbons of PetBusinessProfessor.com in his May 2024 report.
Again, this month, inflation is 50% below the national rate, but back in January 2024 it was +52%.
‘Petflation’ fell from 1.7% in April 2024 to 1.6% in May 2024.
“Prices were +0.2% from April but were +3.3% vs May 23, down from +3.4% last month because there was a bigger Apr>May price lift in 2023,” stated Gibbons.
Pet food and groceries were the only categories with a price decrease from April 2024.
The YOY national Consumer Price Index (CPI) rate of 3.3% is down from 3.4%, just 83% of the 22>23 rate and 38% of the 21>22. In most pet categories, the 23>24 rate is below the 22>23 rates.
In May, pet food prices were down -0.1% from April.
2022 compared to 2024
- U.S. CPI – Prices are +0.2% from April. The YOY increase is 3.3%, down from 3.4%. It peaked at +9.1% back in June 2022. The targeted inflation rate is <2% so we are still 65+% higher than the target. After 12 straight declines, we had 2 lifts, a stable month, 2 consecutive drops, now 3 of 6 with drops, according to Gibbons. The current rate is 17% below 22>23 but the 21>24 rate is still 16.7%, 73.9% of the total inflation since 2019. Inflation was low in early 2021.
- Pet food – Prices are -0.1% vs April and -1.1% vs May 23, down from -0.1%. Now, they are significantly below the Food at Home inflation rate, +1.0%.
“The YOY drop of -1.1% is being measured against a time when prices were 23.3% above the 2019 level and the current decrease is still below the -0.01% drop from 2020 to 2021,” said Gibbons.
The 2021>2024 inflation surge has generated 99.1% of the total 23.0% inflation since 2019.
YTD -- 2022 compared to 2024
- U.S. CPI – The 23>24 rate is 3.3%, the same as April, but down 38% from 22>23 and 60% less than 21>22. It is also 21% below the average YOY increase from 2019>2024, but it’s still 63% more than the average annual increase from 2018>2021. 78% of the 22.7% inflation since 2019 occurred from 2021>24.
- Pet food – YTD inflation is 1.6%, down from 2.2% in April and 89% less than the 22>23 rate. Now, it is also 72% lower than 21>22 and 14% below the average rate from 2018>2020. Pet Food has the highest 22>23 rate on the chart and remains in 2nd place in the 21>24 rates. Deflation in the first half of 2021 kept YTD prices low then prices surged in 2022 and especially in 2023. 94% of the inflation since 2019 occurred from 2021>24.
Update: Pet food producer price index (PPI)
While the retail prices usually mirror the dog and cat PPI they peaked in May 2023, fell slightly in July>Aug, turned up in Sep/Oct, flattened in Nov, then fell in Dec>Feb 2024. In March 2024 they turned up and unexpectedly fell in Apr>May. Coming despite a small 0.9% PPI lift in February and stability from March to May 2024.
Dog canned/wet food is the primary driver in the PPI surge, including a small February 2024 lift, according to Gibbons.
Prices only increased <1% since March 2023, showing 14 months of stability.
The “Other pet food” category is -7.9% from May 2023. The category continues to fall over time, in comparison to the 8.6% from May 2021 and 24.0% from May 2019.
