5 lb Part Skim Mozzarella: $8.67 (a)
102 oz tomatoes: $2.43 (b)
25 lb flour: $9.78 (c)
720 Slice of Pepperoni: $7.76 (d)
Enter the PPI equation:
PPI = $0.01 + (a)/10 + ((b)/24)(2) + (c)/50 + (d)/40; or
PPI = $0.01 + $0.87 + $0.20 + $0.20 + $0.19
Which gives us a 13FEB09 PPI of $1.47. This is an additional 3% drop in 10 days, indicating pizza deflation is real. We are now down 7% in a little over two weeks. We will collect one more data point, and then begin to graph our findings.
I predict that the PPI will continue to drop, for approximately one year, as cash-strapped consumers eat less cheese and more grains. And then the prices for all components of the pizza will begin to rise with inflation.