USDA report says food prices will continue to rise
By: Sydney Sheffield
The United States Department of Agriculture’s (USDA’s) Economic Research Service (ERS) has published the Food Price Outlook, 2022 report, using data from the February 2022 Consumer Price Index and Producer Price Index. The report found that food prices are expected to increase drastically over the next few months.
The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased by 0.9% from January 2022 to February 2022 before seasonal adjustment, up 7.9% from February 2021. The CPI for all food increased 1.0% from January 2022 to February 2022, and food prices were 7.9% higher than in February 2021.
Both foods at the grocery store and away from home are expected to rise. The food-away-from-home (restaurant purchases) CPI increased 0.4% in February 2022 and was 6.8% higher than in January 2021. The food-at-home (grocery store or supermarket food purchases) CPI increased 1.4% from January 2022 to February 2022 and was 8.6% higher than in February 2021. Throughout the year, food-at-home prices are predicted to increase between 3.0% and 4.0%, and food-away-from-home prices are predicted to increase between 5.5% and 6.5%. Food-away-from-home prices are expected to exceed historical averages.
All categories of food except for fresh vegetables had price increases this month. The largest price increases were for meat categories. Beef and veal prices increased by 9.6%, pork by 6.3%, and poultry by 5.6%. The impacts of the conflict in Ukraine and the recent increases in interest rates by the Federal Reserve are expected to put upward and downward pressures on food prices.
Retail poultry prices are high due to low stocks of frozen chicken. Egg prices increased by 2.2% in February 2022. The USDA warns that an ongoing outbreak of highly pathogenic avian influenza could contribute to poultry and egg price. Because of this, poultry prices are now predicted to increase between 6.0% and 7.0% and egg prices are predicted to increase between 2.5% and 3.5%. An increase in the consumption of dairy products has amplified retail prices in recent months. This trend continued in February 2022, with a 1.6% increase in prices for retail dairy products. Dairy product prices are predicted to increase between 4.0% and 5.0% in 2022.
The USDA noted that the increase for all-item CPI is the largest 12-month advance since July 1981.