In 2022 compared with 2021, prices for fats and oils are now predicted to increase by 18.0 and 19.0 percent, cereals and bakery products prices are predicted to increase between 12.5 and 13.5 percent, and other food prices are predicted to increase between 12.0 percent and 13.0 percent. 5 days ago
This page summarizes the December 2022 forecasts, which incorporate the November 2022 Consumer Price Index and Producer Price Index numbers.
See Changes in Food Price Indexes, 2020 through 2023 for data files.
NOTE: The Food Price Outlook is being revised based on the methodology documented in the following report. A revised data series is forthcoming in January 2023. The Food Price Outlook Summary Findings will be based on the revised data series after it is released.
Consumer Price Index for Food (not seasonally adjusted)
The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, decreased by 0.1 percent from October 2022 to November 2022 and was up 7.1 percent from November 2021. The CPI for all food increased 0.2 percent from October 2022 to November 2022, and food prices were 10.6 percent higher than in November 2021.
The level of food price inflation varies depending on whether the food was purchased for consumption at home or away from home:
The food-at-home (grocery store or supermarket food purchases) CPI did not change from October 2022 to November 2022 and was 12.0 percent higher than November 2021; and
The food-away-from-home (restaurant purchases) CPI increased 0.5 percent in November 2022 and was 8.5 percent higher than November 2021.
In 2022, food price increases are expected to be above the increases in 2020 and 2021. In 2022, all food prices are predicted to increase between 9.5 and 10.5 percent, food-at-home prices are predicted to increase between 11.0 and 12.0 percent, and food-away-from-home prices are predicted to increase between 7.0 and 8.0 percent. Food prices are expected to grow more slowly in 2023 than in 2022, but still at above historical average rates. In 2023, all food prices are predicted to increase between 3.5 and 4.5 percent, food-at-home prices are predicted to increase between 3.0 and 4.0 percent, and food-away-from-home prices are predicted to increase between 4.0 and 5.0 percent.
Recent Historical Overview
Between the 1970s and early 2000s, food-at-home prices and food-away-from-home prices increased at similar rates. Since 2009, however, their rates of growth have mostly diverged; while food-at-home prices deflated in 2016 and 2017, monthly food-away-from-home prices have been rising consistently since then. The divergence is partly due to differences between the costs of serving prepared food at restaurants and retailing food in supermarkets and grocery stores.
In 2020, food-at-home prices increased 3.5 percent and food-away-from-home prices 3.4 percent. This convergence was largely driven by a rapid increase in food-at-home prices, while food-away-from-home price inflation remained within 0.3 percentage points of the 2019 inflation rate. The largest price increases were for meat categories: beef and veal prices increased by 9.6 percent, pork prices by 6.3 percent, and poultry prices by 5.6 percent. The only category to decrease in price in 2020 was fresh fruits, by 0.8 percent.
In 2021, food-at-home prices increased 3.5 percent and food-away-from-home prices increased 4.5 percent. The CPI for all food increased an average of 3.9 percent in 2021. Of all the CPI food-at-home categories tracked by the U.S. Department of Agriculture (USDA), Economic Research Service (ERS), the beef and veal category had the largest relative price increase (9.3 percent) and the fresh vegetables category the smallest (1.1 percent). No food categories decreased in price in 2021 compared with prices in 2020.
CPI Forecast Changes This Month
The 2022 forecast ranges for two food categories and one aggregate category were revised upward this month. Four food price categories were revised downward.
The increases in all-food and food-at-home prices continued to slow in November and were the smallest of 2022. Prices increased for eight food categories and three aggregate categories, and egg prices increased by 2.3 percent from October. Prices declined for eight food categories and two aggregate categories, and prices declined by at least a percent for three food categories and one aggregate category in November. The continuing increases in the Federal funds (interest) rate by the Federal Reserve place downward pressure on prices, and prices for unprocessed agricultural commodities have decreased each month since peaking in May 2022. The effects of these conditions will be closely monitored as they unfold to assess their impacts on food prices.
Poultry prices decreased 0.8 percent in November 2022, following a 1.1 percent decrease in October, yet remain 13.1 percent higher than in November 2021. Before October, poultry prices had increased for 12 consecutive months partially due to high costs of wholesale poultry meat. Poultry prices are now predicted to increase between 14.0 and 15.0 percent in 2022.
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Retail egg prices increased 2.3 percent in November 2022 and reached 49.1 percent above November 2021 prices. The ongoing outbreak of highly pathogenic avian influenza (HPAI) continues to reduce the U.S. egg-layer flock, as well as the poultry flock to a lesser extent. This decrease in the egg-layer flock is expected to increase wholesale and retail egg prices for the coming months. This outbreak has contributed to elevated egg and poultry prices as over 57 million birds, 300 commercial flocks, and 47 States have been affected. Price impacts of the outbreak will be monitored closely. Egg prices are now predicted to increase between 30.5 and 31.5 percent in 2022.
Retail prices for fresh vegetables increased 0.8 percent in November 2022, while upstream, wholesale prices for fresh vegetables increased by 38.1 percent. Elevated prices for wholesale fresh vegetables are expected to place upward pressure on retail prices in the coming months. Fresh vegetables prices are now predicted to increase by 6.5 and 7.5 percent and fresh fruits and vegetables prices are predicted to increase between 7.0 and 8.0 percent in 2022.
Following large price increases in January through October 2022, the prices for fats and oils, cereals and bakery products, and other foods either fell or slowed in November 2022. Recent declines in agricultural commodity and energy prices are expected to continue to ease price increases across these categories through the remainder of 2022. In 2022 compared with 2021, prices for fats and oils are now predicted to increase by 18.0 and 19.0 percent, cereals and bakery products prices are predicted to increase between 12.5 and 13.5 percent, and other food prices are predicted to increase between 12.0 percent and 13.0 percent.
Producer Price Index (PPI) for Food (not seasonally adjusted)
A Producer Price Index (PPI) resembles a CPI in that it reflects price changes over time. However, instead of retail prices, a PPI provides a measure of the average prices paid to domestic producers for their output. PPIs are reported for nearly every industry in the goods-producing sector of the economy. Three major PPI commodity groups are of interest to food markets: unprocessed foodstuffs and feedstuffs (formerly called crude foodstuffs and feedstuffs): processed foods and feeds (formerly called intermediate foods and feeds); and finished consumer foods. These groups give a general sense of price movements across various stages of production in the U.S. food supply chain.
The PPIs—measures of changes in farm and wholesale prices—are typically far more volatile than the downstream CPIs. Price volatility decreases as products move from the farm to the wholesale sector to the retail sector. Because of multiple processing stages in the U.S. food system, the CPI typically lags movements in the PPI. The PPI is thus a useful tool for understanding what may soon happen to the CPI.
The USDA, Economic Research Service does not forecast industry-level PPIs for unprocessed, processed, and finished foods and feeds. However, these prices have historically shown a strong correlation with the all-food and food-at-home CPIs.
PPI Forecast Changes This Month
The PPI forecast ranges for nine food categories were revised upward this month. The forecast range for wholesale beef was revised downward.
Farm-level cattle and wholesale beef prices increased 4.1 and 2.9 percent, respectively, in November 2022. Severe droughts have affected cattle producers’ and meat packers’ costs. Farm-level cattle prices were 16.1 percent higher in November 2022 than November 2021. Wholesale beef prices were 15.6 percent lower than in November 2021 but remain historically elevated due to large increases in 2021. Farm-level cattle prices are predicted to increase between 16.5 and 19.5 percent and wholesale beef prices are predicted to decrease between 7.0 and 4.0 percent in 2022.
Wholesale poultry prices increased 1.7 percent in November 2022 following a 10.9-percent decrease in October 2022. Strong production, increasing supplies, and changing trade patterns have generally driven poultry prices down in the final quarter of 2022, despite the ongoing outbreak of HPAI. Farm-level egg prices jumped 19.6 percent and were 280.9 percent higher than November 2021. Highly pathogenic avian influenza continued to affect the egg-layer flock. Wholesale poultry prices are now predicted to increase between 17.0 and 20.0 percent in 2022. Farm-level egg prices are predicted to increase between 146.5 and 149.5 percent in 2022.
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U.S. demand for fluid milk has outpaced increasing numbers of dairy cattle and per cow yields. Farm-level milk prices are now predicted to increase between 37.5 and 40.5 percent in 2022.
Farm-level soybean prices increased by 8.0 percent in November 2022 and were 23.8 percent above November 2021 prices on strong domestic demand. Prices for wholesale fats and oils increased by 3.5 percent in November 2022 and were 14.3 percent above November 2021 prices. Farm-level soybean prices are now predicted to increase between 9.5 and 12.5 percent in 2022, and wholesale fats and oils prices are predicted to increase between 25.0 and 28.0 percent.
Farm-level fruits prices rose by 3.2 percent in November 2022, an increase of 15.8 percent from November 2021. Farm-level vegetables prices jumped by 38.1 percent in November 2022, following 22.4-percent and 15.7-percent increases in October and September, respectively, and were 80.6 percent higher than November 2021. Drought conditions in the western United States have significantly contributed to rising wholesale prices for fresh vegetables. The PPI for lettuce increased 583.3 percent from August 2022 to November 2022. Farm-level fruits prices are now predicted to increase between 17.0 and 20.0 percent, and farm-level vegetables prices are predicted to increase between 48.0 and 51.0 percent in 2022.
Farm-level wheat prices decreased 3.3 percent, a slower decline in prices than anticipated. Farm-level wheat prices are now predicted to increase between 30.0 and 33.0 percent in 2022.
For official USDA farm-level price forecasts, see: World Agricultural Supply and Demand Estimates at a Glance. For additional information, detailed explanations, and analyses of farm-level prices, see USDA Economic Research Service Outlook publications including Livestock, Dairy, and Poultry, Oil Crops, Wheat, Fruit and Tree Nuts, and Vegetables and Pulses.
See Changes in Food Price Indexes, 2020 through 2023 for data files.
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