Food Price Outlook, 2022
This page summarizes the May 2022 forecasts, which incorporate the April 2022 Consumer Price Index and Producer Price Index numbers.
See Changes in Food Price Indexes, 2019 through 2022 for data files.
The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased by 0.6 percent from March 2022 to April 2022 before seasonal adjustment, up 8.3 percent from April 2021. The CPI for all food increased 1.0 percent from March 2022 to April 2022, and food prices were 9.4 percent higher than in April 2021.
The level of food price inflation varies depending on whether the food was purchased for consumption away from home or at home:
- The food-away-from-home (restaurant purchases) CPI increased 0.6 percent in April 2022 and was 7.2 percent higher than April 2021; and
- The food-at-home (grocery store or supermarket food purchases) CPI increased 1.3 percent from March 2022 to April 2022 and was 10.8 percent higher than April 2021.
Food price increases are expected to be above the increases observed in 2020 and 2021. In 2022, food-at-home prices are predicted to increase between 7.0 and 8.0 percent, and food-away-from-home prices are predicted to increase between 6.0 and 7.0 percent. Price increases for food away from home are expected to exceed historical averages and the inflation rate in 2021.
Recent Historical Overview
Between the 1970s and early 2000s, food-at-home prices and food-away-from-home prices increased at similar rates. Since 2009, however, their rates of growth have mostly diverged; while food-at-home prices deflated in 2016 and 2017, monthly food-away-from-home prices have been rising consistently since then. The divergence is partly due to differences between the costs of serving prepared food at restaurants and retailing food in supermarkets and grocery stores.
In 2020, food-at-home prices increased 3.5 percent and food-away-from-home prices 3.4 percent. This convergence was largely driven by a rapid increase in food-at-home prices, while food-away-from-home price inflation remained within 0.3 percentage points of the 2019 inflation rate. The largest price increases were for meat categories: beef and veal prices increased by 9.6 percent, pork prices by 6.3 percent, and poultry prices by 5.6 percent. The only category to decrease in price in 2020 was fresh fruits, by -0.8 percent.
In 2021, food-at-home prices increased 3.5 percent and food-away-from-home prices increased 4.5 percent. The CPI for all food increased an average of 3.9 percent in 2021. Of all the CPI food-at-home categories tracked by the U.S. Department of Agriculture (USDA), Economic Research Service (ERS), the beef and veal category had the largest relative price increase (9.3 percent) and the fresh vegetables category the smallest (1.1 percent). No food categories decreased in price in 2021 compared with 2020.
CPI Forecast Changes This Month
The ranges for 11 food categories and all aggregate categories were revised upward this month. No food price categories were revised downward.
The large increases in all-food, food-away-from-home, and food-at-home prices in April followed similarly large changes in January through March. These price increases were driven by increases for many products. While prices decreased by 0.2 percent or less for beef and veal, fresh vegetables, and sugar and sweets, prices for 8 disaggregate food categories increased by more than a percent in April. 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, respectively. These situations will be closely monitored to assess the net impacts of the concurrent events on food prices as they unfold. All food prices are now predicted to increase between 6.5 and 7.5 percent, food-away-from-home prices are predicted to increase between 6.0 and 7.0 percent, and food-at-home prices are predicted to increase between 7.0 and 8.0 percent in 2022.
Prices for the category of meats increased by 0.7 percent between March 2022 and April 2022. Wholesale pork prices, along with port congestion, contributed to a 0.9-percent increase in retail pork prices in April 2022. Prices for other meats had the largest increase within the “meats” category—2.2 percent—in April 2022. In 2022, pork prices are predicted to increase between 6.0 and 7.0 percent and other meat prices are predicted to increase between 9.0 and 10.0 percent. The aggregate categories of meats, poultry, and fish are predicted to increase between 7.0 and 8.0 percent, and meats are predicted to increase between 6.5 and 7.5 percent in 2022.
An ongoing outbreak of highly pathogenic avian influenza has reduced the U.S. egg-layer flock and drove a 10.3 percent increase in retail egg prices in April 2022. Retail poultry prices have been high, with historically low stocks of frozen chicken (also called “cold storage”). The ongoing highly pathogenic avian influenza outbreak has also contributed to increasing poultry prices as over 38 million birds have been affected. The disease prevalence also impacts international demand for U.S. poultry. Price impacts of the outbreak will be monitored closely. Poultry prices are now predicted to increase between 8.5 and 9.5 percent, and egg prices are predicted to increase between 19.5 and 20.5 percent.
Fish and seafood prices rose by 0.9 percent in April 2022, climbing to 11.9 percent above April 2021 prices. Fish and seafood prices are now predicted to increase between 7.0 and 8.0 percent.
Rapid increases in the consumption of dairy products have driven increases in retail prices in recent months. This trend continued in April 2022 with a 2.4-percent increase in the prices for dairy products. Dairy product prices are predicted to increase between 7.0 and 8.0 percent in 2022.
Following large price increases in January–April 2022, forecast ranges for fats and oils, fresh fruits, cereal and bakery products, nonalcoholic beverages, and other foods have been adjusted upward. In 2022 compared with 2021, fats and oil prices are predicted to increase between 10.0 and 11.0 percent in 2022; fresh fruit prices between 8.5 and 9.5 percent; cereal and bakery product prices between 7.0 and 8.0 percent; nonalcoholic beverage prices between 7.0 and 8.0 percent; and other food prices between 7.5 and 8.5 percent. The aggregate categories of fruits and vegetables are predicted to increase between 6.5 and 7.5 percent, and fresh fruits and vegetables are predicted to increase between 6.5 and 7.5 percent.
Producer Price Index (PPI) for Food (not seasonally adjusted)
A Producer Price Index (PPI) resembles a CPI in that it reflects price changes over time. However, instead of retail prices, a PPI provides a measure of the average prices paid to domestic producers for their output. PPIs are reported for nearly every industry in the goods-producing sector of the economy. Three major PPI commodity groups are of interest to food markets: unprocessed foodstuffs and feedstuffs (formerly called crude foodstuffs and feedstuffs): processed foods and feeds (formerly called intermediate foods and feeds); and finished consumer foods. These groups give a general sense of price movements across various stages of production in the U.S. food supply chain.
The PPIs—measures of changes in farm and wholesale prices—are typically far more volatile than the downstream CPIs. Price volatility decreases as products move from the farm to the wholesale sector to the retail sector. Because of multiple processing stages in the U.S. food system, the CPI typically lags movements in the PPI. The PPI is thus a useful tool for understanding what may soon happen to the CPI.
The USDA, Economic Research Service does not forecast industry-level PPIs for unprocessed, processed, and finished foods and feeds. However, these prices have historically shown a strong correlation with the all-food and food-at-home CPIs.
PPI Forecast Changes This Month
PPI forecast ranges for wholesale poultry, farm-level eggs, and wholesale dairy were revised upward this month. No forecast ranges were revised downward.
Wholesale poultry prices increased by 2.6 percent between March and April 2022. Highly pathogenic avian influenza could either place upward pressure on poultry prices through decreased production or downward pressure through decreased access to international markets. Wholesale poultry prices are now predicted to increase between 15.0 and 18.0 percent in 2022.
Farm-level egg prices increased by 110.1 percent in April 2022. The price increases followed the loss of millions of laying hens to highly pathogenic avian influenza, primarily in Iowa and the surrounding States. Farm-level egg prices are now predicted to increase between 73.5 and 76.5 percent in 2022.
Wholesale dairy prices increased by 2.7 percent in April 2022 on strong domestic and international demand. Wholesale dairy prices are predicted to increase between 13.0 and 16.0 percent.
For official USDA farm-level price forecasts, see: World Agricultural Supply and Demand Estimates at a Glance. For additional information, detailed explanations, and analyses of farm-level prices, see USDA Economic Research Service Outlook publications including Livestock, Dairy, and Poultry, Oil Crops, Wheat, Fruit and Tree Nuts, and Vegetables and Pulses.
See Changes in Food Price Indexes, 2019 through 2022 for data files.