The United States is headed for the fifth year in a row of lower-than-average increases in grocery prices, part of a longer trend of smaller and less volatile changes in food inflation, said two USDA economists.
Retail food prices are living up to USDA's four-month-old forecast of tepid food inflation, with a barely preceptable increase of 1 percent. In its monthly Food Price Outlook, the USDA said the inflation outlook held steady for all categories of food except for dairy products, which declined to 0.5 percent for the year.
Americans will pay about $1 more than a year ago if they plan a spring picnic that includes sandwiches, potato salad, orange juice, and shredded cheese, according to an informal survey of grocery store prices in 23 states.
U.S. food prices will rise a scant 1.5 percent this year, continuing a three-year run of below-normal food inflation rates, said a USDA forecast, pointing to grocery store prices that are at a near standstill.
Grocery prices are down for the second year in a row, the first multi-year run of food deflation since the mid-1950s. In its monthly Food Price Outlook, the USDA credits the strong dollar for the year-on-year decline in grocery prices of 1.3 percent in 2016 and 0.2 percent in 2017; only the seventh and eighth years, respectively, of deflation since World War II.
Thanks to the strong dollar, food inflation is standing still this year following the first instance, in 2016, of food deflation since the 1960s, says the USDA. In a new forecast, USDA economists say overall supermarket price levels in 2018 could be lower than they were in 2015.
A spot check of grocery prices in 39 states found that the ingredients for a traditional Thanksgiving meal will cost 1.5-percent less than last year, and, at $49.12 for a dinner for 10, are the lowest since 2013, said the American Farm Bureau Federation. The biggest item for the meal, in weight and dollars — 16-pound turkey — costs $1.40 a pound, or 1.4-percent less than last year.
Amazon is lowering prices on a few items at its newly acquired Whole Food’s stores, but that doesn’t mean the grocery retailer will become the best bargain in town quite yet or that other companies will feel pushed to lower their prices too. “Shoppers shouldn’t expect a price war to break out,” …
After five years of statewide drought, crop plantings in California have been delayed by too much rain, causing prices to rise. Some industry experts think prices could stay high until mid-May. The delays “have led to shortfalls of crops including lettuce and broccoli and sent wholesale prices soaring,” says Bloomberg News.