May 2026 Commodity Inflation Trendspoter: Industry Overview

Research evidence excerpt

May 2026 Commodity Inflation Trendspoter: Industry Overview

Methodology

Tracking sequential changes in commodity inflation

Our Trendspotter report provides a monthly update of sequential changes in the y/y

price of the respective cost baskets for tracked companies on a spot market and Next

Twelve Months (NTM) basis (using average forward prices). Predicting specific cost

inflation for each company is difficult without knowledge of their hedged positions. This

analysis gives a directional perspective of changes in cost basket trends. We believe this

is useful for scrutinizing forward assumptions about margins and pricing. Disclaimer:

The cost basket identified as an indicator above is intended to be an indicative metric

only and may not be used for reference purposes or as a measure of performance for

any financial instrument or contract, or otherwise relied upon by third parties for any

other purpose, without the prior written consent of BofA Global Research. This cost

basket was not created to act as a benchmark.

Cost Breakdown

We estimated a breakdown of the major commodity inputs for each of the packaged

food companies in our coverage universe. Specifically, we separated commodity inputs

into 2 major categories- soft and hard. Soft commodities are primarily foodstuff

ingredients, whereas hard commodities are tied to the manufacture, packaging and

distribution of a company’s products.

Spot Inflation

We referenced spot prices from a variety of sources, including Blimling estimates, the

USDA and a variety of Bloomberg indices, in order to track month to month inflation

trends for commodities across different companies’ cost baskets. In order to estimate

monthly spot inflation, we calculate the percent change in average spot prices