Overall, supermarket prices will barely increase this year, the government said, although beef prices remain high and egg prices are 30-percent higher than a year ago, an after-effect of the bird flu epidemic. In its monthly Food Price Outlook, the USDA predicted a 1.5-percent increase in the price of “food at home,” the category where Americans spend 59 cents of their food dollar. An annual increase of 1.5 percent in grocery prices is well below the average increase of 2.6 percent a year, and it’s a decrease of 0.5 percentage points from the USDA’s previous forecast.
In its new forecast, the department lowered its forecast for poultry, seafood, dairy and fresh vegetable price increases. Those foods account for nearly one-third of grocery spending. After hitting record highs last year, pork prices are expected to fall 3.5 percent this year. Beef surged 12 percent in 2014 to record high prices and an additional increase of 7 percent is forecast for this year. A 2-percent increase is predicted for 2016 as an expansion in cattle herds results in more stock fattened for slaughter.
Egg prices skyrocketed during the summer but fell 5 percent in a month and are still 30-percent higher than last fall. The average price increase for this year is estimated by USDA at 15.5 percent. The bird flu epidemic killed 10 percent of the hens that lay eggs for table consumption.
Americans spend nearly 41 cents of the food dollar on “food away from home,” which includes carry-out, restaurant and institutional dining. That category is forecast to see a 2.5-percent increase in prices this year, slightly below the average of 2.7 percent. For the year, food inflation is estimated at 2.5 percent, in line with the 20-year average of 2.6 percent. Food prices are forecast to rise by 3 percent in 2016. The forecast assumes normal weather.