Grocery prices are forecast to rise marginally this year, following the first year of food-price deflation since 1967, said USDA’s monthly Food Price Outlook. Supermarket food prices fell by 1.3 percent in 2016, pulled down by lower prices for beef, pork, dairy and eggs, products that account for one-fifth of grocery spending.
“While food-at-home prices declined in 2016, prices from food away from home increased 2.6 percent,” said USDA. “Restaurant prices have been rising consistently month-over-month, due, in part, to differences in the cost structure of restaurants versus supermarkets or grocery stores. Restaurant prices primarily comprise labor and rental costs with only a small portion going for food.”
Overall, food prices rose by 0.3 percent last year because supermarket spending is so much larger than spending for food at restaurants, carryout vendors and institutions. Usually, food prices increase by an average 2.5 percent a year.
Grocery prices are estimated to increase by 0,5 percent from 2016 levels, said USDA. Beef, pork and fresh vegetable prices are forecast to fall while poultry, fish and seafood increase. Food away-from-home would rise by 2.5 percent, close to the historical average, and the overall increase in food prices would be 1.5 percent, down from last month’s estimate of a 2 percent increase.