Food Price Outlook, 2022 and 2023
This page summarizes the September 2022 forecasts, which incorporate the August 2022 Consumer Price Index and Producer Price Index numbers.
See Changes in Food Price Indexes, 2020 through 2023 for data files.
NOTE: The Food Price Outlook is being revised based on the methodology documented in the following report. A revised data series is forthcoming. The Food Price Outlook Summary Findings will be based on the revised data series after it is released.Time-Series Methods for Forecasting and Modeling Uncertainty in the Food Price Outlook
The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, did not change from July 2022 to August 2022 and was up 8.3 percent from August 2021. The CPI for all food increased 0.8 percent from July 2022 to August 2022, and food prices were 11.4 percent higher than in August 2021.
The level of food price inflation varies depending on whether the food was purchased for consumption at home or away from home:
- The food-at-home (grocery store or supermarket food purchases) CPI increased 0.7 percent from July 2022 to August 2022 and was 13.5 percent higher than August 2021; and
- The food-away-from-home (restaurant purchases) CPI increased 0.9 percent in August 2022 and was 8.0 percent higher than August 2021.
In 2022, food price increases are expected to be above the increases in 2020 and 2021. In 2022, all food prices are predicted to increase between 9.0 and 10.0 percent, food-at-home prices are predicted to increase between 10.5 and 11.5 percent, and food-away-from-home prices are predicted to increase between 6.5 and 7.5 percent. Food prices are expected to grow more slowly in 2023 than in 2022, but still above historical average rates. In 2023, all food prices are predicted to increase between 2.5 and 3.5 percent, food-at-home prices are predicted to increase between 2.0 and 3.0 percent, and food-away-from-home prices are predicted to increase between 3.0 and 4.0 percent.
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 six food categories and two aggregate categories were revised upward this month. Three food price categories were revised downward.
The large increases in all-food and food-at-home prices in August followed similarly large changes in January through July. These price increases were driven by increases for many products. Prices for six food categories increased by at least 1.0 percent in August. However, prices also declined for five food categories and the aggregate category of meats. The continuing increases in the Federal funds (interest) rate by the Federal Reserve place downward pressure on prices, and the energy CPI decreased by 6.2 percent in August. The effects of these conditions will be closely monitored as they unfold to assess their concurrent impacts on food prices. In 2022, all food prices are now predicted to increase between 9.0 and 10.0 percent, and food-at-home prices are now predicted to increase between 10.5 and 11.5 percent.
Beef and veal prices declined by 0.3 percent in August 2022, following declines or no change for the previous 5 months. Beef and veal prices are up 2.5 percent year over year from August 2021, the smallest increase of all food categories, though prices remain elevated following large increases in 2020 and 2021. Beef and veal prices are now predicted to increase between 5.5 and 6.5 percent in 2022.
Fish and seafood prices decreased by 0.2 percent in August 2022 following a 0.6 percent decrease in July. Fish and seafood prices are 8.7 percent higher than August 2021. Fish and seafood prices are now predicted to increase between 9.0 and 10.0 percent in 2022.
Retail egg prices increased 2.9 percent in August 2022, following large increases in April, May, and July, and are 39.8 percent higher than August 2021. An ongoing outbreak of highly pathogenic avian influenza (HPAI) has reduced the U.S. egg-layer flock, as well as the poultry flock to a lesser extent. This outbreak has contributed to elevated egg prices and increasing poultry prices as over 44 million birds, 209 commercial flocks, and 39 States have been affected. Price impacts of the outbreak will be monitored closely. Egg prices are now predicted to increase between 26.0 and 27.0 percent in 2022.
Fresh fruits prices decreased by 0.6 percent in August 2022, following price decreases in June and July that could be attributed to seasonal factors, and are 8.3 percent higher than August 2021. Fresh vegetables prices increased 1.0 percent in August 2022 and are 7.6 percent higher than August 2021. The forecast range for fresh fruits was revised downward, and the forecast range for fresh vegetables was revised upward for 2022. Fresh fruits prices are now predicted to increase between 8.0 and 9.0 percent in 2022, and fresh vegetables prices are predicted to increase between 4.5 and 5.5 percent in 2022.
Following large price increases in January through August 2022, forecast ranges for fats and oils, processed fruits and vegetables, cereals and bakery products, and nonalcoholic beverages have been adjusted upward. Economy-wide factors, including ongoing supply chain issues and energy, transportation, and labor costs, have contributed to increases in prices across food categories. However, recent declines in agricultural commodity and energy prices are expected to ease price increases across these categories through the remainder of 2022. In 2022 compared with 2021, prices for fats and oils are now predicted to increase between 18.0 and 19.0 percent, processed fruits and vegetables prices between 10.0 and 11.0 percent, cereals and bakery products prices between 13.0 and 14.0 percent, and nonalcoholic beverages prices between 9.5 percent and 10.5 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
The PPI forecast ranges for farm-level cattle and farm-level eggs were revised upward this month. The forecast ranges for wholesale beef, wholesale pork, wholesale poultry, and wholesale fats and oils were revised downward.
Farm-level cattle prices increased 2.6 percent in August 2022 and are up 17.6 percent from August 2021 due to strong demand. Wholesale beef prices declined 0.2 percent in August 2022 and are 12.6 percent lower than in August 2021 but remain elevated by historic standards. Farm-level cattle prices are now predicted to increase between 15.0 and 18.0 percent in 2022. Wholesale beef prices are predicted to change between -1.0 and 2.0 percent in 2022.
Wholesale pork prices increased 2.2 percent in August 2022 but have declined 7.7 percent compared to August 2021 due to higher inventories. Wholesale pork prices are now predicted to decrease between 4.0 and 1.0 percent in 2022.
Wholesale poultry prices decreased 2.5 percent in August 2022. Farm-level eggs prices declined 24.4 percent in August 2022, following a 43.1 percent increase in July, and are 139.6 percent higher than August 2021. Stocks of frozen chicken increased in July, but the ongoing HPAI outbreak could continue to impact poultry and, to a greater extent, egg prices since most affected birds have been commercial egg layers. Wholesale poultry prices are now predicted to increase between 23.5 and 26.5 percent in 2022. Farm-level eggs prices are now predicted to increase between 100.0 and 103.0 percent in 2022.
Wholesale fats and oils prices declined by 1.9 percent in August 2022, following a 9.0- percent decrease in July 2022, due to higher production and increased supplies. Wholesale fats and oils prices are now predicted to increase between 16.0 and 19.0 percent in 2022.
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, 2020 through 2023 for data files.