Please ensure Javascript is enabled for purposes of website accessibility

Sizzling rise of food inflation


Commodity costs moved abruptly higher when the Ukraine/Russia war broke out February last year. Key food sector inputs (i.e., wheat, corn, soy, packaging, freight, oil, etc) started rising at that time. The way in which these costs flow through to on-shelf food prices differs by product, company and geography.

Companies typically employ hedging strategies which delays the impact of input cost moves giving companies time to adjust pricing. Many companies began bringing prices up as they saw these costs rise, made material price increases in July/August 2022, and continued taking price incremental increases through the fall 2022 and into the winter of 2022/early 2023. With commodity prices rolling, there is a view that it will be difficult for companies to raise prices significantly in H2 2023. Therefore, as we annualize the higher prices pushed through last summer and if the input cost environment remains benign, it is expected that food inflation will moderate.

Karen Miki Behr, portfolio manager, Newton Investment Management


All investments involve risk, including the possible loss of principal. Certain investments involve greater or unique risks that should be considered along with the objectives, fees, and expenses before investing.

A significant overweight or underweight of companies, industries, or market sectors could cause performance to be more or less sensitive to developments affection those sectors.

“Newton” and/or the “Newton Investment Management” brand refers to the following group of affiliated companies: Newton Investment Management Limited (NIM) and Newton Investment Management North America, LLC (NIMNA). NIM is incorporated in the United Kingdom (Registered in England no. 1371973) and is authorized and regulated by the Financial Conduct Authority in the conduct of investment business. Both Newton firms are registered with the Securities and Exchange Commission (SEC) in the United States of America as an investment adviser under the Investment Advisers Act of 1940. Newton is a subsidiary of The Bank of New York Mellon Corporation.

BNY Mellon Investment Management is one of the world’s leading investment management organizations, encompassing BNY Mellon’s affiliated investment management firms and global distribution companies. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the corporation as a whole or its various subsidiaries generally.

This material has been provided for informational purposes only and should not be construed as investment advice or a recommendation of any particular investment product, strategy, investment manager or account arrangement, and should not serve as a primary basis for investment decisions. Prospective investors should consult a legal, tax or financial professional in order to determine whether any investment product, strategy or service is appropriate for their particular circumstances. Views expressed are those of the author stated and do not reflect views of other managers or the firm overall. Views are current as of the date of this publication and subject to change.

The information is based on current market conditions, which will fluctuate and may be superseded by subsequent market events or for other reasons. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission.

Not FDIC-Insured | No Bank Guarantee | May Lose Value

© 2023 BNY Mellon Securities Corporation, distributor, 240 Greenwich Street, 9th Floor, New York, NY 10286