Despite headline inflation moderating in the June 2026 Consumer Price Index (CPI), food prices remain stubbornly elevated and continue to impact household budgets, according to RaboResearch senior food analyst Michael Harvey.

The latest CPI data, released by the Australian Bureau of Statistics, showed overall inflation had risen by 3.8 per cent in the year to June 2026, down from an annual reading of 4.0 per cent in May. However, inflation remains above the Reserve Bank of Australia's 2-3 per cent annual target range, indicating ongoing cost pressures for households and businesses.

Mr Harvey said the latest CPI data showed food and non-alcoholic beverage price inflation remained elevated at 3.3 per cent year-on-year, unchanged from May 2026. Higher prices for meals out and takeaway food were the largest contributor, he said.

“Grocery inflation remained broad-based, with prices rising across almost every category except eggs and vegetables,” Mr Harvey said.

Above-trend price growth was recorded in key staples, particularly red meat (beef and lamb), dairy (milk) and fruit.

Looking ahead, Mr Harvey said, rising input costs for food producers and the food supply chain – along with weather-related production risks – suggest food price pressures “are more likely to strengthen than ease” through the remainder of 2026, as manufacturers and retailers continue to pass through higher energy, labour and production costs to consumers.

El Niño presents an additional upside risk to food prices, he said, with reduced rainfall and higher temperatures likely to constrain Australian crop and livestock production.

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