Grocery prices will rise an average of 11 percent this year, the largest year-on-year increase since 1974, when prices soared by a torrid 14.9 percent, said the USDA. The monthly Food Price Outlook said grocery inflation would ebb to a near-normal 2.5 percent in 2023.
USDA economists said prices for beef, seafood and fresh fruit were down, while they were up for fats and oils, cereals and bakery goods, eggs and vegetables, fresh or processed. A month ago, the USDA said grocery prices would rise 10.5 percent compared to 2021, and the all-food index, which combines groceries and food-away-from-home, would rise 9 percent. Both rose 0.5 percentage points this month.
“The large increases in all-food and and food-at-home prices in August followed similarly large changes in January through July,” said the Economics Research Service report. “These price increases were driven by increases for many products.”
Petroleum prices were falling and the Federal Reserve Board’s increases in interest rates “place downward pressure on prices,” said the report.
Egg prices were forecast to rise 26.5 percent this year, influenced by the ongoing outbreak of highly pathogenic avian influenza, with fats and oils rising 18.5 percent, and cereals and bakery products 13.5 percent. Ordinarily, egg prices increase an average 3.2 percent, fats and oils an average 2.3 percent, and cereals and bakery products an average 2.1 percent annually.