The pain at the grocery checkout counter gets worse

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The government’s report today on consumer price inflation in April looked pretty good on the surface, with the overall price index edging up 0.2%, compared with a 0.3% rise in March.

But as my colleague Maura Reynolds points out here, energy prices in April were flat within the CPI only because of the ‘seasonal adjustment’ factor employed by the government’s statisticians. We all know what really happened with gasoline prices last month.

The CPI’s tracking of April food prices, meanwhile, will ring truer with consumers: Food and beverage costs overall rose 0.9%, and food bought for home consumption jumped 1.5%. Both were the largest monthly increases since 1990, says Peter Kretzmer, economist at Bank of America.

Rising global demand for grain -- for human consumption and, in the case of corn, for ethanol -- has been a driving force behind higher food costs in general, of course.

The accompanying chart, worked up by Bespoke Investment Group, shows where the price bite has been most severe over the last year among major food items in the CPI. White flour tops the list, up 46.3% in the 12 months through April, as the price of a bushel of wheat nearly doubled in the period.

Not everything in your grocery cart costs more these days. Within the CPI, lettuce prices fell 8.5% in the 12 months through April, according to Bespoke. Prices of many meats are down as well; sirloin steak has fallen 4.7% from a year ago (fire up the grill!).

But as Bespoke notes, the drop in meat prices may be temporary: The number of animals being sent up for slaughter has risen as farmers have been squeezed by high feed prices. ‘While a short-term effect of this is lower prices for meat items, longer term it’s likely to lead to higher meat prices,’ Bespoke says.