Thanks to declines in food prices in 2016 and 2017, grocery store prices will stand at a lower overall level at the end of this year than they were at the end of 2015, said the monthly Food Price Outlook. For the second month in a row, USDA raised its forecast of price increases for fresh vegetables but forecast a scant 0.5 percent rise in food prices for the year.
“Prices for vegetables were up across the board – retail potato prices rose 2.3 percent, tomato prices rose 0.5 percent, retail lettuce prices were up 3.4 percent, and other fresh vegetable prices were up 1.0 percent,” said USDA in a review of price changes during July. Fresh vegetables are forecast to rise in price by 0.5 percent this year and by 2.5 percent in 2019. Shoppers spend 3.5 cents of the food dollar on fresh vegetables.
If USDA’s forecast proves true, 2018 will be the third year in a row of lower-than-normal food inflation, both for grocery prices and for “food away from home,” which includes restaurants and fast food outlets. The “all food” index, covering both categories, is estimated to rise by 1.25 percent this year, roughly half of the 20-year average of 2.4 percent annually.