Will food prices go down in 2023?

According to the report, food prices are expected to grow more slowly in 2023 than in 2022. However, they will still continue to grow at above historical average rates. Overall, food price inflation is predicted to increase between 2.5% and 3.5 percent. Food-at-home prices are forecast to increase between 2-3 percent.

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Will Grocery Store Prices Keep Soaring?

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Food prices, unfortunately, are not likely to decrease next year. The Food Price Outlook, 2022 and 2023 report from the U.S. Department of Agriculture Economic Research Service (USDA ERS) summarizes September 2022 forecasts, incorporating the August 2022 Consumer Price Index (CPI) and Producer Price Index (PPI) numbers. Here’s what the forecast for food prices in 2023 may potentially look like for consumers.

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How the Level of Food Price Inflation Varies

Before we look at the Food Price Outlook, 2022 and 2023, it’s important to break down the varying levels of food price inflation. The Food Price Outlook, 2022 and 2023 noted there’s a difference in food-at-home CPI versus food-away-from-home CPI. Food-at-home consists of grocery store or supermarket food purchases. Food-at-home CPI increased 0.7% from July 2022 to August 2022. It was 13.5% higher than August 2021. Food-away-from-home consists of restaurant purchases. Food-away-from-home CPI increased 0.9% in August 2022. It was 8% higher than August 2021. According to the report, the all-items CPI did not change from July 2022 to August 2022. The CPI for all food increased 0.8% from July 2022 to August 2022. Food prices were 11.4% higher than in August 2021.

Slow Growth in 2023

According to the report, food prices are expected to grow more slowly in 2023 than in 2022. However, they will still continue to grow at above historical average rates.

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Overall, food price inflation is predicted to increase between 2.5% and 3.5 percent. Food-at-home prices are forecast to increase between 2-3 percent. A 3-4% increase is anticipated for food-away-from-home prices.

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What’s Contributing To Increasing Food Prices?

Several factors are influencing ongoing food price increases. In the report, the USDA examines key contributing factors which are driving up food prices.

Avian Influenza Outbreak

Elevated egg prices and increasing poultry prices have been largely due to the avian influenza. This outbreak has significantly reduced the U.S. egg-layer flock. According to the USDA, over 44 million birds, 209 commercial flocks and 39 U.S. states have been affected by HPAI. Retail egg prices increased 2.9% in August 2022, following large increases in April, May and July 2022. Egg prices are now 39.8% higher compared to August 2021.

Economy-Wide Factors

Certain economy-wide factors are contributing to increases in prices across food categories. These include the following:

Ongoing supply chain issues

Energy costs

Transportation costs

Labor costs

Will We Ever Get Back to “Normal” Food Prices?

While it’s difficult to predict when, exactly, food prices will start to come down, it doesn’t hurt to start being optimistic about the gradual end of inflation. In an Op-Ed with The Wall Street Journal, Alan Blinder, professor of economics and public affairs at Princeton University and former vice chairman of the Federal Reserve, wrote we are not likely doomed to high inflation for years.

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“One day, hopefully soon, food and energy prices will level off and the supply chain problems will dissipate,” Blinder wrote. “Depending on the details of timing, inflation will fall as quickly and dramatically as it rose. We’ve seen it happen before.”

What happens to your money in the bank if war breaks out?

“Your money is safe inside a bank. Bank deposits are insured by the FDIC and are protected up to at least $250,000. The best place for your emergency fund is a money market account or savings account. If you want to keep some cash at home, that's fine, but I don't recommend cashing out your savings.”

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Many people are reluctant to keep large amounts of money in their homes for fear of theft or misplacement. Keeping cash at home is risky, especially when it’s in large denominations. A home break-in is the type of emergency you won’t have money for if your cash supply is stolen — physical money isn’t insured and it’s unlikely to be recovered. Finding secure and clever places to hide your emergency fund can safeguard the security of your assets; think of it as making a bank within your home. Common advice is to keep some cash at your house, but not too much. The $1,000 cash fund Prakash recommended for having at home should be kept in small denominations. “Favor smaller bills like twenties because some retailers won’t accept larger notes,” she said. However, when looking to store your money in a compact fashion, larger bills in fewer quantities take up less space — so it’s up to your discretion. Whatever you decide, stash your cash away in a practical, yet unorthodox way. “If you’re going to have cash at home, make sure it’s in a quality, fireproof safe,” Hogan said. “This is more secure than the usual suspects — under the mattress or the coffee container! Be reasonable with how much you put in the safe. It’s OK to keep a couple thousand at home, but I want you to keep the bulk of your money secure and protected in a bank.”