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Retail food price inflation in 2022 surpassed 2021 rates in most categories

Thursday, January 26, 2023

Food-at-home prices increased by 11.4 percent in 2022, more than three times the rate in 2021 (3.5 percent) and much faster than the 2.0-percent historical annual average from 2002 to 2021. Of the food categories depicted in the chart, all except beef and veal grew faster in 2022 than in 2021. In 2022, price increases surpassed 10 percent for food at home and for nine food categories. Egg prices grew at the fastest rate (32.2 percent) after an outbreak of highly pathogenic avian influenza (HPAI) throughout 2022. Prices for fats and oils increased by 18.5 percent, largely because of higher dairy and oilseed prices. Prices also rose for poultry (14.6 percent) and other meats (14.2 percent). Elevated prices for wholesale flour—attributed to the conflict in Ukraine and rising fertilizer prices—and eggs contributed to a 13.0-percent price increase for cereals and bakery products. Prices for beef and veal (5.3 percent), fresh vegetables (7.0 percent), and fresh fruits (7.9 percent) rose more slowly, but all categories exceeded their historical averages. Food prices grew more quickly than the overall rate of inflation (8.0 percent), as the HPAI outbreak, the Ukraine conflict, and economy-wide inflationary pressures contributed specifically to rising food prices. USDA, Economic Research Service (ERS) researchers project food-at-home prices will increase 8.0 percent in 2023, with a prediction interval of 4.5 to 11.7 percent. ERS tracks aggregate food category prices and publishes price forecasts in the monthly Food Price Outlook data product, updated January 25, 2023.

Food retailing market concentration increased more at national level than county level over past three decades

Wednesday, January 25, 2023

The U.S. food retail sector experienced substantial consolidation and structural change over the last three decades. Market concentration, as measured by the Herfindahl-Hirschman Index (HHI), is a measure of the extent to which market shares are concentrated between firms of the retail food sector at the national, State, Metropolitan Statistical Area, and county levels in the United States. This analysis includes all establishments with a significant portion of food sales that are likely substitutes for each other: supermarkets and other grocery (except convenience) and warehouse clubs and supercenters. Although the national market is less concentrated than the average State level, according to the HHI, national market concentration increased substantially between 1990 and 2019 (458 percent). In comparison, average county-level market concentration has remained relatively constant over the past 30 years, increasing only 94 percent. While national measures provide information about larger trends, trends in localized markets are likely more relevant for consumers, food-retail competitors, and policymakers. This chart was drawn from the USDA, Economic Research Service economic research report A Disaggregated View of Market Concentration in the Food Retail Industry, which uses data from the National Establishment Time Series (NETS) to calculate and examine the market conditions of food retailing from 1990 to 2019. The report published in January 2023.

One-third of U.S. food dollar spent on food services in 2021, a record high

Tuesday, January 10, 2023

In 2021, 33.6 cents of an average dollar spent on domestically produced food went to foodservice establishments, which include restaurants and other food-away-from-home outlets. At more than one-third of the 2021 food dollar, the foodservice share increased 3.5 cents over 2020 to reach its highest value in the USDA, Economic Research Service’s (ERS) Food Dollar Series. The share for food services does not include expenses paid to other industry groups, such as food, energy, and financial services. The shares for energy, advertising, finance and insurance, and legal and accounting changed less than 0.1 cent from their 2020 values, while the declines among remaining industry group shares ranged from 0.1 cent lower (packaging) to 1.0 cent lower (food processing). Annual shifts in the food dollar shares between industry groups occur for a variety of reasons, including changes in the mix of foods consumers buy, costs of materials, ingredients, and other inputs, as well as changes in the balance of food at home and away from home. The 2021 changes in the industry group shares reflect shifts toward pre-pandemic trends that were interrupted when consumers spent more on food-at-home during the Coronavirus (COVID-19) pandemic. The industry group shares food dollar chart is available for 1993 to 2021 and can be found in ERS’s Food Dollar Series data product, updated November 17, 2022.

Baking ingredient prices rose in 2022

Tuesday, December 13, 2022

As people sift through holiday baking recipes and head to the store, they will find key ingredients cost more this year. The total cost for five baking staples – flour, sugar, milk, butter, and eggs – was about 22 percent higher through the first 10 months of 2022 compared with the same period in 2021. A 5-pound bag of flour, 4-pound bag of sugar, gallon of whole milk, pound of butter, and a dozen eggs cost a total $16.55 in 2022, compared with $13.55 in 2021, an increase of $3.00. Egg prices increased the fastest (60 percent) and cost about $0.98 more per dozen compared with 2021, as the egg industry was affected by the highly pathogenic avian influenza outbreak. Prices for flour and butter each rose by about 20 percent, adding about $0.40 to the price of a bag of flour and $0.71 to a pound of butter. Prices increased more slowly for milk (16 percent) and sugar (13 percent) in 2022, although price increases for all products were above historical averages. USDA, Economic Research Service tracks aggregate food category prices and publishes price forecasts in the monthly Food Price Outlook data product, which predicts food-at-home prices will increase between 11 and 12 percent in 2022.

Farm share of U.S. food dollar reached historic low in 2021

Monday, November 28, 2022

U.S. farm establishments received 14.5 cents per dollar spent on domestically produced food in 2021—a decrease of 1.0 cent from a revised 15.5 cents in 2020—to the lowest recorded farm share value in nearly three decades. The remaining portion of the food dollar—known as the marketing share—covers the costs of getting domestically produced food from farms to points of purchase, including costs related to packaging, transporting, processing, and selling to consumers. One contributor to the 2021 decline in farm share was a shift to food-away-from-home (FAFH) spending. Farm establishments typically receive a smaller share of FAFH spending because of the large amount of value added by FAFH outlets such as restaurants. As a result, the farm share generally decreases when FAFH spending increases faster year-over-year than food-at-home spending. FAFH spending increased markedly in 2021 after a sharp decrease early in the Coronavirus (COVID-19) pandemic. Accordingly, the farm share returned to its pre-pandemic downward trend in 2021 after an increase in 2020. The USDA, Economic Research Service (ERS) uses input-output analysis to calculate the farm and marketing shares from a typical food dollar. The data for this chart can be found in ERS’s Food Dollar Series data product, updated November 17, 2022.

Rising food costs baked into Thanksgiving pies in 2022, no matter how you slice it

Tuesday, November 22, 2022

Pie is a time-honored staple of Thanksgiving around the country. U.S. consumers baking a homemade apple pie this year can expect to pay about $8.76 for the ingredients, an increase of about 19.5 percent from 2021. Prices increased for all ingredients. Apples comprised about half the cost of a pie ($4.56), and prices for Granny Smith apples increased from an average $1.41 per pound in October 2021 to $1.52 per pound in October 2022. Prices increased the most for eggs (90.0 percent) and flour (34.6 percent), but rising butter costs had the largest impact on the total, adding an additional $0.68 to the cost of a pie between 2021 and 2022. If serving the apple pie a la mode, ice cream adds $0.36 per scoop. The most recent average price data are from October; prices for Thanksgiving week may vary. For example, savings may occur if grocers offer holiday discounts. USDA, Economic Research Service (ERS) used average price data from the U.S. Bureau of Labor Statistics and USDA, Agricultural Marketing Service Weekly Advertised Fruit and Vegetable Retail Price data to derive the cost for the ingredients of an apple pie. Forecasts for aggregate food category prices can be found in ERS’s Food Price Outlook data product, updated November 22.

U.S. consumers have spent more on food in 2022 than in 2019, even when adjusted for inflation

Friday, October 21, 2022

Real, or inflation-adjusted, monthly food spending in the United States has increased in 2022 as compared to the same period in 2019, before the Coronavirus (COVID-19) pandemic. Inflation-adjusted food spending measures the quantity of food spending after removing price increase effects. Real monthly food at home (FAH) spending, or food intended for off-premise consumption from retailers such as grocery stores, increased each month through August 2022 as compared to 2019 except in August, with the highest increase in January at almost 8 percent. This increase may be the result of U.S. consumers purchasing more foods or choosing more expensive grocery store options, such as pre-cut vegetables and fruits, imported out-of-season foods, organic products, and prepared dishes, than they did in 2019. Real monthly food away from home (FAFH) spending, or food consumed at outlets such as restaurants or cafeterias, also increased each month so far in 2022, with the highest increase in April at 12 percent. Similarly, the increase seen in 2022 in real FAFH spending may be the result of U.S. consumers purchasing more FAFH in general or shifting toward more expensive options, such as foods at full-service restaurants. The data for this chart come from the ERS’s Food Expenditure Series data product.

Rising costs have percolated through to coffee prices in 2022

Thursday, September 29, 2022

National Coffee Day is today, September 29, and according to a National Coffee Association survey, 66 percent of U.S. adults are coffee drinkers. Consumers who get through the daily grind with a 12-ounce cup of black coffee they brewed at home paid, on average, 23.6 cents in the first 8 months of 2022, compared to 19.3 cents in 2021. For those who prefer their daily joe with milk or sugar, adding an ounce of whole milk costs 3.2 cents in 2022, up from 2.7 cents in 2021. Each teaspoon of sugar added 0.7 cents to the cost of a cup of coffee in 2022, compared to 0.6 cents in 2021. Average ground coffee prices through the first 8 months of 2022 were 21.9 percent higher compared to the same period in 2021. Prices rose more slowly for milk (15.9 percent) and sugar (11.0 percent) compared to coffee during those same months. More information on USDA, Economic Research Service’s food price data can be found in the Food Price Outlook data product, updated September 23, 2022.

All food categories experienced higher inflation through July in 2022 compared with 2021

Thursday, August 25, 2022

Retail food prices increased 8.9 percent in the first seven months of 2022, higher than the rate over the same period in 2021 (1.9 percent) and 2020 (3.1 percent). The 20-year historical average for the same months from 2001 to 2020 was 1.7 percent. All 13 food categories depicted in the chart experienced faster price increases so far in 2022 compared with both the same period in 2021 and historical average price increases through July. All food categories saw price increases of at least 4 percent in the first seven months of 2022. Prices for three food categories increased by more than 10 percent: eggs (20.9 percent), fats and oils (13.4 percent), and poultry (11.8 percent). Inflationary pressures differ by food category. For example, eggs and poultry prices are currently much higher than their historical average in part because of an outbreak of highly pathogenic avian influenza (HPAI). Fresh vegetables historically experienced higher midyear average price increases compared to most categories, but prices for fresh vegetables increased the least of all categories over the first seven months of both 2022 (4.9 percent) and 2021 (0.4 percent). Prices will continue to change during the remainder of 2022 and may significantly affect the annual inflation rate. For example, prices increased for all food categories in the second half of 2021, and some increased more rapidly than the first half of 2021. USDA, Economic Research Service (ERS) researchers project food-at-home prices will increase between 10 and 11 percent in 2022. Forecasts for all food categories, including for 2023, are available in ERS’s monthly Food Price Outlook data product, updated August 25, 2022.

Farmers receive about 15 to 18 percent of retail price for fresh potatoes

Wednesday, August 17, 2022

Food processors, manufacturers, wholesalers, and retailers transform raw agricultural commodities into convenient food products for U.S. consumers. Value added to commodities through these companies’ marketing services and money paid to farmers for their commodities account for a substantial portion of retail food prices. The farm share of the retail price of fresh potatoes—the ratio of what farmers receive to what consumers pay per pound in grocery stores—has fluctuated between 15 percent and 18 percent in recent years. The national monthly average price of fresh potatoes was $0.78 per pound at grocery stores in 2021, and the monthly average price received by farmers was $0.12 per pound. As part of the farm share calculation, the USDA, Economic Research Service (ERS) assumes that farmers supply a little more than 1.04 pounds of fresh potatoes for each pound sold at retail to account for the roughly 4 percent of fresh potatoes that is lost through spoilage or damage. Therefore, at an average farm price of $0.12 per pound, the farm receipt was 12.5 cents for each pound of potatoes sold in 2021, about 16 percent of the retail price. ERS researchers recently hosted a data training webinar on farm-to-retail price spreads and farm share statistics. More information on ERS’s farm share data can be found in the Price Spreads from Farm to Consumer data product, updated June 28, 2022.

More than half of U.S. counties had at least one farmers market that accepted credit cards in 2018

Tuesday, August 9, 2022

U.S. consumers are increasingly able to use a credit card to purchase fresh fruits and vegetables at a farmers market— a retail outlet in which two or more vendors sell agricultural products directly to customers through a common marketing channel. In 2018, 72 percent of U.S. counties reported having at least one farmers market, and 70 percent of those counties reported having one or more farmers markets with the option to purchase using credit cards. The number of farmers markets that report accepting credit cards in a county is provided in the USDA, Economic Research Service’s (ERS) Food Environment Atlas and the underlying data can be accessed and downloaded. The Atlas is an interactive mapping tool with statistics on more than 280 food environment indicators at the county or State level that can influence food choices and diet quality. According to the current Atlas, 1,595 counties—51 percent of all U.S. counties—had one or more farmers markets that accepted credit cards in 2018. However, the market density varied among those counties, with 86 counties having more than 10 farmers markets that accepted credit cards as a form of payment for goods. This map appears in ERS’s Food Environment Atlas, updated September 2020.

Share of income spent on food in the United States rebounded to pre-pandemic level in 2021

Thursday, August 4, 2022

The share of U.S. consumers’ disposable personal income (DPI) spent on food was relatively steady from 2000 to 2019, rising from 9.93 percent in 2000 to 10.27 percent in 2019. DPI is the amount of money that U.S. consumers have left to spend or save after paying taxes. During the Coronavirus (COVID-19) pandemic, the share of income spent on food dropped to a new low of 9.4 percent in 2020. Food spending rebounded in 2021, however, and the share of income spent on food jumped to 10.27 percent, equaling the share in 2019. Between 2000 and 2019, consumer spending trended toward food away from home (restaurants, fast-food places, schools, and other dining establishments). From 2019 to 2020, this trend reversed as consumers spent more of their incomes on food at supermarkets, convenience stores, warehouse club stores, supercenters, and other retailers (food at home). As COVID-19 vaccines were distributed and many mobility restrictions were lifted in 2021, the share of food-away-from-home spending bounced back to just shy of the food-at-home spending share, signaling a return towards pre-pandemic spending trends. The data for this chart come from the USDA, Economic Research Service’s Food Expenditure Series data product.

Farmers received smaller share of the price consumers paid for fresh tomatoes in 2021 than in 2020

Wednesday, July 6, 2022

The farm share of the retail price of fresh, field-grown tomatoes—the ratio of what farmers received to what consumers paid per pound in grocery stores—fell from 43 percent in 2020 to 36 percent in 2021. While the national, monthly average price of such tomatoes at grocery stores fell 11 cents to $1.85 per pound in 2021, the monthly average price received by farmers simultaneously fell 16 cents to $0.56 per pound. As part of calculating the farm share, the USDA, Economic Research Service (ERS) assumes that farmers supply a little less than 1.2 pounds of fresh tomatoes for each pound sold at retail, as 15 percent of the fresh tomatoes shipped to grocery stores is lost through spoilage or is otherwise damaged. Farm prices for tomatoes were lower in 2021 as U.S. domestic production of all types of fresh-market tomatoes rose 1.3 percent. This came despite a 4-percent decline in overall fresh vegetable production caused partly by extreme heat in growing regions. More information on ERS’s farm share data can be found in the Price Spreads from Farm to Consumer data product, updated June 3, 2022.

Sales at retail food stores were higher in May 2022 than May 2019, but growth varied by food category

Thursday, June 30, 2022

Total retail food sales in the United States were higher the week ending May 1, 2022, $15.2 billion, compared with May 1, 2019, $12.7 billion, with substantial variation among categories. During the same period, the share of meats, eggs, and nuts increased from 16.8 percent to 17.1 percent, while the share of vegetables fell from 6.8 percent to 6.4 percent. The largest 3-year change was for fats and oils, which were 25.5 percent higher in sales value in 2022 compared with 2019. While the smallest 3-year change was for alcohol, which was 12.3 percent higher in sales value in 2022 compared with 2019. The USDA, Economic Research Service’s (ERS) Weekly Retail Food Sales data product provides a current and detailed picture of U.S. food-at-home retail sales. These data are clustered to food group levels and representative at the national and State levels. Two publicly available sets of the Weekly Retail Food Sales data are updated monthly by ERS: One with national totals and totals by 51 product subcategories (including alcohol), and the other with State totals for 39 States by 10 product categories (including alcohol). The data for this chart are available in ERS’s Weekly Retail Food Sales data product, updated on May 31, 2022.

Cost of a home-grilled cheeseburger up 21 cents from 2021

Wednesday, June 29, 2022

For Fourth of July cookouts this year, cheeseburgers could cost more than they did in 2021. In May 2022, the ingredients for a home-prepared 1/4-pound cheeseburger totaled $2.07 per burger, with ground beef making up the largest cost at $1.20 and cheddar cheese accounting for $0.35. This represents an increase of 11.3 percent compared to the $1.86 it cost to produce the same cheeseburger in May 2021. Retail prices for one-pound quantities of all ingredients were higher in May 2022 compared with May 2021. Ground beef prices increased 16.9 percent and accounted for 17 cents of the increase between 2021 and 2022. Cheddar cheese and bread costs each rose about 1 cent per burger from 2021 to 2022. Iceberg lettuce prices rose the most, by 23.3 percent, but the relatively small proportion it contributes to the total cost of a burger means it added just 2 cents to the total. This chart uses data from the ERS Food Price Outlook data product, which was updated on June 24, 2022, U.S. Bureau of Labor Statistics Average Price data, and USDA Agricultural Marketing Service Weekly Advertised Fruit and Vegetables Retail Prices.

U.S. consumers spent more money on food away from home than food at home in 2021, returning to pre-pandemic trend

Monday, June 13, 2022

Real, or inflation-adjusted, annual food spending in the United States has increased every year since 1997 except in 2008, 2009, and 2020. Sales increased from 1997 to 2019 for both food at home (FAH), food intended for off-premise consumption from retailers such as grocery stores, and food away from home (FAFH), food consumed at outlets such as restaurants or cafeterias. Over this period, real FAH spending increased at a slower rate (43.5 percent) than for FAFH (73.9 percent). In 2020, during the Coronavirus (COVID-19) pandemic, real total food expenditures fell 6.6 percent from 2019. U.S. consumers’ food-spending patterns changed as efforts were made to limit the spread of COVID-19, which included stay-at-home orders. FAFH spending decreased by 15.8 percent in 2020, while FAH spending increased by 3.9 percent. In 2021, real total food expenditures increased 12.2 percent from 2020. With increased household income during the economic recovery and relaxed safety measures around indoor dining and social distancing, FAFH spending increased by 21.1 percent in 2021 from the previous year and was the primary driver of the overall food spending increase. FAH spending increased by 4 percent. The data for this chart come from the ERS’s Food Expenditure Series data product.

Retail food price inflation varies across U.S. metro areas

Monday, May 23, 2022

Retail food price inflation varies by locality. In the 10 years from 2012 to 2021, increases in retail food prices ranged from an average of 2.4 percent a year in Honolulu, HI, to 0.9 percent in the Dallas-Fort Worth, TX, area. Retail food at home includes food bought in grocery stores as opposed to restaurants. Differences in transportation costs and retail overhead expenses, such as labor and rent, can explain some of the variation among cities because retailers often pass local cost increases on to consumers in the form of higher prices. Furthermore, differences in consumer preferences among cities for specific foods may help explain variation in inflation rates. For example, a city whose residents strongly prefer foods with less price inflation (such as fresh fruits and vegetables, at 1.3 and 0.8 percent average yearly growth for 2012-21) might experience lower food-at-home price inflation than a city whose residents buy more beef and veal, which increased by an average of 4.2 percent a year in the 10-year period. Across the United States, food-at-home prices increased by an average of 1.4 percent a year over the 10-year period. This chart appears in an Economic Research Service data visualization, Food Price Environment: Interactive Visualization, released May 12, 2022.

Spending dropped at all types of food-away-from-home outlets in first year of COVID-19 pandemic

Wednesday, May 18, 2022

Spending decreased at each of the nine types of food-away-from-home (FAFH) outlets measured in the USDA, Economic Research Service’s Food Expenditure Series (FES) from 2019 to 2020. Although existing infrastructure, such as drive-through services, enabled limited-service restaurants to comply with Coronavirus (COVID-19) pandemic safety measures, these establishments still saw a 6.7-percent decline in annual spending. Full-service restaurants, which accounted for more FAFH spending than all other outlets from 1997 to 2019, experienced a decrease in spending of 31.7 percent in 2020. This was partly due to pandemic-related closures during some of the year. Hotels and motels, recreational places, and drinking places also experienced closures and capacity restrictions throughout much of 2020. Food spending fell 42.9 percent at hotels and motels, 37.7 percent at recreational places, and 40.7 percent at drinking places. Food expenditures at schools and colleges dropped 7.8 percent in 2020. The 2021 annual FES data will be released in June 2022 and will provide an update on these trends as well as other food spending data. This chart uses the FES data and appears in the ERS’s Amber Waves article, “Food Spending by U.S. Consumers Fell Almost 8 Percent in 2020”, October 2021.

Property income’s share of the food dollar reached 20-year high in 2020

Monday, May 16, 2022

In 2020, the average dollar spent by U.S. consumers on domestically produced food – called the food dollar – returned 39.4 cents as property income, which is income received by owners of capital assets (e.g. land, equipment, and patents) after paying for other intermediate inputs, labor, and output taxes. This 13.5-percent increase from 2019 brought property income’s share of the food dollar to the highest level since 1997. Conversely, the proportion of output taxes, or total taxes and government fees less subsidies, dropped by more than half from 2019 to 4.3 cents of the 2020 food dollar. This reflects increased agricultural subsidies as well as other government policies that affected taxes in 2020. Of the remaining food dollar, 51.6 cents compensated labor for wages and benefits while 4.7 cents went to imported ingredients and inputs. USDA, Economic Research Service’s (ERS) annual Food Dollar Series provides insight into the industries that make up the U.S. food system and their contributions to total U.S. spending on domestically produced food. Annual shifts in the food dollar shares between primary factors occur for a variety of reasons, including changes in the mix of foods consumers buy, the balance of food consumed at home and away from home, and changes in primary factor markets for non-food production. The data for this chart are available for the years 1997 to 2020 and can be found in ERS’s Food Dollar Series data product, updated on March 17, 2022.

Higher retail meat prices during COVID-19 pandemic negatively impacted U.S. households in 2020

Thursday, May 12, 2022

During 2020, U.S. households spent 14.5 percent more money to buy meat for at-home consumption as compared with 2019. This increase in spending reflected both an increase in the amount of meat households bought from retailers to offset reductions in what households previously consumed at restaurants and higher retail food prices. Using scanner data from Information Resources, Inc. (IRI), USDA, Economic Research Service (ERS) researchers examined and compared U.S. households’ meat purchases in 2020 and 2019 to answer this question: If retail prices for at-home meats had remained at their 2019 levels throughout 2020, how much better off economically would U.S. households have been? Researchers estimated the amount of “welfare loss,” or reduction in U.S. households’ well-being, by determining how much more money would be needed to buy meat in response to retail price changes and be satisfied. Despite maintaining their overall level of meat consumption, U.S. households’ welfare losses in 2020 from increases in retail meat prices were largest during the late spring and early summer when operations at meat-packing plants were most affected by the Coronavirus (COVID-19) pandemic. Those losses peaked at $24.51 per household in June 2020. Higher prices that month for beef accounted for welfare losses of $8.30 per household, for poultry the losses were $8.18 per household, and for pork the losses were $7.07 per household. In December 2020, U.S. household welfare losses were down to $6.19 per household, with higher prices for beef, poultry, and pork accounting for $2.44, $1.89, and $1.54, respectively. This chart appears in the ERS report Quantifying Consumer Welfare Impacts of Higher Meat Prices During the COVID-19 Pandemic, released April 2022.