Americans will see the second year in a row of larger-than-usual food price increases, with food inflation now forecast at 3.5 percent this year, following the pandemic-driven 3.4 percent increase of 2020, said USDA economists on Thursday. Meat and seafood were the leading factors in the increase in the all-food forecast, previously 3 percent. The long-term average yearly increase is 2.4 percent.
Beef, pork, and poultry prices have risen for five months in a row, said the Economic Research Service in its monthly Food Price Outlook. “Prices have been driven up by strong domestic and international demand, high feed costs, and supply chain disruptions. Winter storms and drought impacted meat prices this spring, and processing facility closures due to cybersecurity attacks impacted beef and other meat production in May.” Beef prices are forecast to rise by 4.5 percent this year, pork by 5.5 percent, and poultry by 3.5 percent.
Fish and seafood prices, because of reduced imports, labor shortages, and strong domestic demand, are expected to rise by 3.5 percent this year.
Prices were also on the rise for dairy products, fats and oils, and sugar and sweets. The USDA raised its forecast this month for prices in 11 of the 22 food categories it tracks. Overall, grocery prices would rise by 3 percent, up from the previous estimate of 2.5 percent. The USDA says that 55.1 cents of each food dollar is spent on groceries; meat, poultry, and seafood account for one-fifth of grocery purchases.
“Food away from home,” the category that includes restaurant meals and carryout food, was forecast to increase by 4 percent. The July estimate was 3.5 percent.
Food inflation will ebb in 2022, according to the USDA.
The Food Price Outlook is available here.