The producer, import, and export price indexes impact food manufacturing businesses. Therefore, these price indexes affect hiring costs.
Understanding price indexes and their impact on food manufacturing labor helps save money in the hiring process. Partnering with a staffing firm that specializes in the industry can help.
Producer Price Index
The producer price index (PPI) is a group of indexes that measures the average change over time in selling prices received by domestic producers of goods and services. According to the U.S. Bureau of Labor Statistics (BLS), among final demand goods, food prices increased by 1.3% over the year ended May 2024.
Because these price changes are from the seller’s perspective, they contrast with the consumer price index (CPI), which measures price changes from the purchaser’s perspective. Additionally, sellers’ and purchasers’ prices might differ because of government subsidies, sales and excise taxes, and distribution costs.
Import and Export Price Indexes
The import and export price indexes (MXP) measure the change in the price of goods and services purchased from abroad by US consumers and businesses (imports) and sold to foreign buyers (exports). These indexes measure changes in the prices of non-military goods and services. The numbers indicate the strength of the US economy and consumer spending, the demand for US goods abroad, and the pace of increasing import prices.
Import price index
According to the U.S. BLS, prices for foods, feeds, and beverages declined 1.6% in May 2024, following a 1.3% advance the prior month. The May drop was led by a 10.9% decrease in vegetable prices and a 4.6% decline in fruit prices.
Export price index
According to the U.S. BLS, agricultural export prices advanced 0.5% in May 2024, following a 0.4% decline the prior month. Higher prices in May for wheat, fruit, corn, and meat contributed to the increase in export agriculture prices. Additionally, export agricultural prices decreased 6.6% over the past 12 months.
Impact of Price Indexes on Food Manufacturing Hiring Costs
The PPI measures producer inflation. Monitoring the price changes from raw materials to finished goods and distribution indicates upcoming price inflation for consumers.
Tight food manufacturing labor markets and wage increases put upward pressure on the costs of labor, production, and distribution. Because producers face higher costs, many pass on these costs to consumers through higher prices. Or, producers might absorb the cost increases because of competitive pressures or other factors.
Would You Like to Lower Your Food Manufacturing Hiring Costs?
Impact Staffing can help your Atlanta-based food manufacturing company effectively manage hiring costs. Reach out to learn more today.
