Grocery prices will rise by a scant 0.7 percent in 2025, the smallest increase in seven years, said USDA analysts on Thursday in their first forecast of food inflation in the new year. Grocery price inflation was forecast at a below-normal 1 percent this year.
“Food prices are expected to continue to decelerate in 2024, compared to recent years,” said the monthly Food Price Outlook report. Grocery inflation crested at 11.4 percent in 2022, the highest rate in half a century, then fell to 5 percent in 2023. The long-term average is 2.7 percent a year.
Pork and poultry prices were moderating this year, the USDA report said, while prices for seafood, eggs, dairy, and fresh fruit and vegetables will be lower than in 2023.
For 2025, meat prices are forecast to rise at a below-normal rate of 2.9 percent, said the USDA. Prices for cereal and bakery products are expected to rise at a slower-than-usual rate. Fresh fruit and vegetable prices are expected to fall.
Consumers spend roughly 20 cents of each grocery dollar on meats, poultry, and fish, and nearly 13 cents of the grocery dollar on fresh fruits and vegetables.