Input Costs

How It Works

Input costs for food production include several categories that each affect the Cheeseburger Index differently. Feed costs (corn and soybean meal) are the largest input for cattle production, typically representing 60-70% of variable costs for feedlot operators. When corn prices rose from $3.50 to $7.00 per bushel during 2021-2022, it took 6-9 months for that increase to flow through to retail beef prices. Energy costs affect food at every stage: diesel for farm equipment, natural gas for food processing (bakeries, dairies), electricity for cold storage, and fuel for delivery trucks. In 2022, diesel prices rose 55%, adding an estimated $0.15-0.25 per pound to retail meat prices through transportation alone. Labor costs have risen steadily across food production — meatpacking wages are up 22% since 2019, and grocery store wages are up 18%. Packaging costs (cardboard, plastic wrap, aluminum) rose 15-25% during supply chain disruptions. All of these input costs eventually surface in the BLS average price data that the Cheeseburger Index tracks, though with varying time lags depending on the ingredient.

Related Terms

• Commodity Prices — The wholesale prices of raw agricultural products like cattle, corn, wheat, and dairy on commodity exchanges — these upstream prices eventually flow through to retail food costs.
• Food Supply Chain — The network of farms, processors, distributors, and retailers that moves food from production to the consumer's plate, typically spanning 1,500+ miles for the average American meal.
• Farm-to-Table Markup — The difference between what a farmer receives for raw agricultural products and what consumers pay at retail — food typically costs 3-5x at the grocery store what the farmer was paid.