ERS Food Price Outlook forecasts converged on actual food price changes in 2023

In 2023, all food prices (representing both food at home and food away from home) increased by 5.8 percent on average compared with 2022. The USDA, Economic Research Service (ERS) publishes food price forecasts in the Food Price Outlook (FPO) data product. Each month, the FPO forecasts the annual average change in prices for the current year, and the forecasts are presented as a midpoint and a prediction interval. The prediction interval, which represents uncertainty of the forecast, starts out wider at the beginning of the year and narrows as forecasts incorporate more months of observed data and the forecast period shortens. In January of each year, final data are available to assess the performance of the forecasts from the previous year. During the first few months of 2023, the all-food forecast midpoints were higher than the actual annual average change in all food prices, but the prediction interval from each forecast developed in 2023 contained the actual annual average change in prices. By July, the forecast midpoint converged on the actual average change in prices and remained within 0.1 percent through the remainder of the year. ERS researchers project all food prices to increase 1.3 percent in 2024, with a prediction interval of -1.4 to 4.2 percent. This chart is based on data from the ERS Food Price Outlook, updated January 25, 2024.

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