Grocery prices will rise 3.5 percent in the new year, nearly double the long-term average but a dramatic slowdown from this year’s 11.5 percent, said the Agriculture Department Thursday in its Food Price Outlook. It was the second time in two months that the USDA has raised its estimate of grocery inflation in 2023.
USDA economists linked the higher rate of grocery price inflation in 2023 with expected higher prices for eggs, dairy products, fats and oils, and fresh vegetables.
“Food prices are expected to grow more slowly in 2023 than in 2022, but still at above historical average rates,” said the monthly Outlook report. Over the past 20 years, grocery prices have increased by an average of 2 percent a year. The USDA initially forecast a 2.5 percent increase in grocery prices in 2023 and raised the estimate to 3 percent in October.
Egg prices were forecast to skyrocket by 30 percent and dairy products by 12 percent this year, then slow to 4.5 percent each in the new year. Meats, poultry, and fish, the most costly sector of consumer food spending, were forecast to climb 10 percent this year and slow to 2.5 percent in 2023.