The Truflation index uses the geometrical average of 10 food commodity markets(10M) to reflect the daily food prices. The commodities futures contracts are short-term 1-3 months agreements between producers and suppliers and thus better reflect the actual market prices of food. Additionally, according to recent research, the rising commodities prices are passed onto the consumers, especially in developed countries.
10M used in the Truflation Index are the most liquid, highest volume, long-running US food futures markets:
- Live Cattle
- Lean Hogs
- Soybean meal
- Soybean oil
Going directly to the producer-supplier prices of food circumvents the problem of disguising inflation through:
- Smaller packages, aka ‘shrinkflation’
- Substitution for lower-quality ingredients
- Consumers substituting expensive products with cheaper alternatives
In April 2022, Truflation added robust new food data of the market food prices for from the global data provider, NielsenIQ.