Food price inflation for 2024 will be less than half its 2023 pace, the USDA forecasts in its Food Price Outlook.
In 2024, the USDA forecasts that prices for all food are predicted to increase by 2.2%, down from 5.8% in 2023. Food-at-home (grocery) prices are predicted to increase by 1%, and food-away-from-home (restaurant) prices are predicted to increase by 4.3%, the USDA reports.
In 2025, the USDA said food prices are expected to increase more slowly than the historical average rate of growth. In 2025, prices for all food are predicted to increase 2%.
Food-at-home prices are predicted to increase 0.7% in 2025, and food-away-from-home prices are predicted to increase 3%.
The Food Price Outlook tracks and forecasts the annual percentage change in prices by averaging observed and forecast prices for all months in the current year compared to all months in the previous year, according to the report.
Between the 1970s and early 2000s, food-at-home prices and food-away-from-home prices increased at similar rates, the USDA said.
However, between 2009 and 2019, their growth rates diverged: While food-at-home prices deflated in 2016 and 2017, monthly food-away-from-home prices rose consistently. Differences between the costs of serving prepared food at restaurants and retailing food in supermarkets and grocery stores partly explain this difference, the agency said.
In 2020, food-at-home prices increased by 3.5% and food-away-from-home prices increased by 3.4%, the USDA said.
“This convergence was largely driven by a rapid increase in food-at-home prices following the onset of the Coronavirus (COVID-19) pandemic, particularly for meats and poultry, while food-away-from-home price inflation remained similar to its 2019 rate,” the report said.
In 2021, all food prices increased by 3.9% as prices began accelerating in the second half of the year.
In 2022, food prices increased by 9.9%, faster than in any year since 1979, the USDA said. Food-at-home prices increased by 11.4%, while food-away-from-home prices increased by 7.7%.
“Food prices rose partly due to a Highly Pathogenic Avian Influenza (HPAI) outbreak that affected egg and poultry prices, along with the conflict in Ukraine, which compounded other economy-wide inflationary pressures such as high energy costs,” the report said. “All food price categories increased by more than 5%, and all food categories grew faster than their historical average rate.”
In 2023, food prices increased by 5.8%, the USDA said.
“Food price growth slowed in 2023 as economy-wide inflationary pressures, supply chain issues, and wholesale food prices eased from 2022,” the report said.
Food-at-home prices increased by 5% in 2023, and food-away-from-home prices increased by 7.1%. While prices increased for all food categories except for pork, prices grew more slowly in 2023 than in 2022 for all categories.
June swoon
The USDA said prices were lower in June 2024 compared with June 2023 for four food-at-home categories: fish and seafood, dairy products, fresh fruits, and fresh vegetables.
The USDA said prices are predicted to increase in 2024 for 11 food-at-home categories and decrease for four categories, though the measures of uncertainty do not rule out either an increase or decrease in prices during the year for many categories.
In 2024, prices for most food categories are predicted to change at a rate below their 20-year historical average, the USDA said.
Prices decreased by 2.6% for fresh fruits in June compared with May, partially due to seasonal factors. Fresh fruit prices were 1.7% lower than June 2023 due in part to improved growing conditions and higher production, the USDA said.
“Apple prices, in particular, were 12% lower than June 2023 due to higher supplies,” the report said.
Prices for fresh fruits are predicted to decrease by 0.8% in 2024, according to the USDA.
