As we enter the home stretch of 2024, can we see what 2025 might promise for pet food? Especially with inflation, which has greatly impacted not only the industry but also pet owners and retailers for several years now. In July 2024, the last data available at press time, U.S. pet food prices were stabilizing, rising at about the same low monthly rate as in 2021 — but that doesn’t mean everyone’s pain has dissipated.
In July, pet food prices were down year over year (YOY) by .4% from July 2023. That’s significantly lower than the U.S. national consumer price index (CPI, at 2.9% in July 2024), inflation for all pet products and services (what John Gibbons of PetBusinessProfessor.com calls “petflation,” at 1.9%) and human food (1.1%). The data came from the U.S. Bureau of Labor Statistics (BLS), compiled and analyzed by Gibbons.
These rates are comparable to the same period in 2021, before pandemic-induced supply chain and economic disruptions drove inflation to dizzying new heights. “Petflation has definitely slowed in 2024,” Gibbons wrote. “July was 38% below the average for the month and 34.5% lower than the national CPI.”
That’s the good news. However, he also provided historical data showing actual pet food prices are still nearly 23% higher than in July 2021 and going back to July 2019, before the pandemic. As the monthly inflation rates continue to fall, those three- and five-year differences are also starting to decline a bit — is it enough for pet owners struggling to feed their pets at higher costs?
The leading indicator for retail prices is the pet food producer price index (PPI): What manufacturers and suppliers pay for all the raw inputs that go into making pet food. The July 2024 (?) BLS data show U.S. producer prices rising only 0.7% YOY, though elevated 24% since 2021 and nearly 31% since 2019. With the PPI and its historical comparisons essentially stable at that higher level, it doesn’t bode well for retail prices to decline in any significant or helpful way.
Once prices go up, they rarely come back down. “One fact is often ignored in the headlines: Inflation is cumulative,” Gibbons wrote. It has widespread impact, leading to some pet owners “downgrading” their pet foods, turning to private label and purchasing even more online.