Lard Prices Fall as Crude Oil Tops $90
Lard is getting cheaper for the fourth straight month, even as crude oil jumps above $90 a barrel and raises pressure on broader inflation and fuel costs.
That divergence matters because it shows not all commodity prices are moving in lockstep. Energy markets are being pushed higher by renewed geopolitical tension around Iran and supply risks through the Strait of Hormuz, while animal-fat prices are easing after months of declines, giving food manufacturers and some consumers a modest cost break.
The latest available U.S. Producer Price Index for lard shows the category at 284.057 in July, down from 286.279 in June and 290.515 in May, marking a fourth monthly decline from the recent peak. A forecast for August points to a rebound to 289.769, but the current trend still reflects a soft patch in a niche food input that can feed into processed-food pricing.
For investors, the split is important because it points to uneven input-cost pressure across the consumer staples complex. Lower lard prices can help margin-sensitive food makers, while higher oil can lift packaging, transport and energy costs, complicating the inflation outlook for companies such as Conagra, General Mills and J.M. Smucker, which all face volatile commodity inputs and energy expenses.
The broader macro picture is mixed. The Consumer Price Index stands at 332.813 in July, with a forecast for a modest August increase, while the personal consumption expenditures price index is projected to edge higher as well. Against that backdrop, a four-month slide in lard is a reminder that commodity inflation is fragmenting by sector rather than easing or rising uniformly.
For markets, the takeaway is that investors should not read one commodity move as a clean inflation signal. If crude’s surge persists, it could offset some of the relief from softer food inputs and keep pressure on margins, transport costs and headline inflation readings into the next batch of price data.
| Entity | Gains | Losses |
|---|---|---|
| Food manufacturers | ▲Lower input costs | ▼Less pricing power on shelves |
| Consumers | ▲Slight grocery relief | ▼No help from fuel inflation |
| Energy producers | ▲Higher crude prices | ▼More scrutiny on inflation impact |
| Staples stocks | ▲Softer fat/feed costs | ▼Higher freight and utility expenses |