Retail food prices are living up to USDA’s four-month-old forecast, with a barely preceptable increase of 1 percent. In its monthly Food Price Outlook, the USDA said the inflation outlook held steady for all categories of food except for dairy products, which declined to 0.5 percent for the year.
At 1 percent, the rise in “food at home,” the USDA description for groceries, would be well below the 20-year average of a 2.1 percent annual increase. It would be the largest increase since 1.9 percent in 2015. In 2016, grocery prices rose by 0.3 percent. They fell by 1.3 percent in 2016 and by 0.2 percent in 2017.
“While fats and oils, fresh vegetables, pork, nonalcoholic beverages, and processed fruits and vegetables could potentially decline in price, prices for beef and veal, poultry, eggs, and dairy are expected to increase,” said the USDA report. “Due to deflation in 2016 and 2017, expected price increases would still leave overall price levels in 2018 lower than in 2015.”
When “food away from home” – restaurant and carryout food – is combined with supermarket purchases, a U.S. food inflation rate of 1.5 percent is forecast. The 20-year average is 2.4 percent annually. The USDA says Americans spent nearly 58 cents of the food dollar on food-at-home.