Grocery prices will rise by a nearly invisible 0.5 percent this year and a modest 1.5 percent in 2019, estimated the USDA’s monthly Food Price Outlook on Thursday. If the forecast proves true, 2019 would be the fourth year in a row that supermarket prices rise at a much slower rate than the usual 2.1 percent annually.
“Several products may continue to see lower prices, including pork, other meats, fats and oils, processed fruits and vegetables, and nonalcoholic beverages,” said USDA economists in their first forecast for 2019. “Beef and veal, poultry, fish and seafood, fresh vegetables, sugars and sweets, and other foods are all expected to increase, but at rates lower than their 20-year historical averages.”
Thanks to price deflation in the previous two years, grocery prices in the aggregate will be lower this year than they were in 2015. In June, the USDA forecast that grocery prices would increase by 1 percent this year. It lowered its estimate this month, to 0.5 percent, because of lower prices in nine of its 19 food categories, including poultry, dairy, fruits and vegetables, cereal and bakery products, and nonalcoholic beverages. Together, the categories account for 43 cents of each $1 of food spending.
For the past decade, prices for “food away from home,” such as meals bought at restaurants and fast-food outlets, have risen at notably different rates. The USDA estimates a 2.5 percent inflation rate for this year and 2019 for “food away from home,” on track with the 20-year annual average increase of 2.7 percent.