Food Price Outlook, 2022
This page summarizes the June 2022 forecasts, which incorporate the May 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 1.1 percent from April 2022 to May 2022 before seasonal adjustment, up 8.6 percent from May 2021. The CPI for all food increased 1.1 percent from April 2022 to May 2022, and food prices were 10.1 percent higher than in May 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 0.7 percent in May 2022 and was 7.4 percent higher than May 2021; and
- The food-at-home (grocery store or supermarket food purchases) CPI increased 1.3 percent from April 2022 to May 2022 and was 11.9 percent higher than May 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 8.5 and 9.5 percent, and food-away-from-home prices are predicted to increase between 6.0 and 7.0 percent. Price increases for food at home and 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 10 food categories and 4 aggregate categories were revised upward this month. No food price categories were revised downward.
The large increases in all-food and food-at-home prices in May followed similarly large changes in January through April. These price increases were driven by increases for many products. Prices for meats, poultry, and fish, and the prices for 9 disaggregate food categories increased by at least 1.0 percent in May. The prices for five disaggregate categories increased by more than 2.0 percent. The impacts of the conflict in Ukraine are expected to put upward pressure on food prices, and the recent increases in interest rates by the Federal Reserve are expected to put downward pressure on food prices. These situations will be closely monitored to assess the net impacts of the concurrent events on food prices as they unfold. In 2022, all food prices are now predicted to increase between 7.5 and 8.5 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 8.5 and 9.5 percent.
Prices for the category of meats increased by 0.4 percent between April 2022 and May 2022. Port congestion and higher shipping costs have partially offset reduced demand due to China’s rebound from African Swine Fever and have contributed to a 0.8-percent increase in retail pork prices in May 2022. Other meat prices rose 0.5 percent in May following a 2.2-percent increase in April. In 2022, pork prices are predicted to increase between 7.0 and 8.0 percent, and other meat prices are predicted to increase between 11.5 and 12.5 percent. The aggregate category of meats, poultry, and fish is predicted to increase between 8.5 and 9.5 percent, and meat prices are predicted to increase between 7.5 and 8.5 percent.
An ongoing outbreak of highly pathogenic avian influenza (HPAI) reduced the U.S. egg-layer flock and drove a 5.0-percent increase in retail egg prices in May 2022 following a 10.3-percent increase in April. Retail poultry prices have been high, with historically low stocks of frozen chicken (also called “cold storage”). The ongoing HPAI outbreak has also contributed to increasing poultry prices as over 40 million birds in 36 States 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 13.0 and 14.0 percent, and egg prices are predicted to increase between 19.5 and 20.5 percent in 2022.
Fish and seafood prices rose by 2.3 percent in May 2022, climbing to 12.2 percent above May 2021 prices. Among the subcategories of fish and seafood, frozen fish and seafood prices increased the most at 3.1 percent. Fish and seafood prices are now predicted to increase between 8.5 and 9.5 percent in 2022.
Rapid increases in the consumption of dairy products have driven increases in retail prices in recent months. This trend continued in May 2022 with a 2.6-percent increase in the prices for dairy products. Dairy product prices are predicted to increase between 10.5 and 11.5 percent in 2022.
Following large price increases in January–May 2022, forecast ranges for fats and oils, processed fruits and vegetables, sugar and sweets, cereal and bakery products, and other foods have been adjusted upward. In 2022 compared with 2021, fats and oils prices are predicted to increase between 14.0 and 15.0 percent, processed fruits and vegetables prices between 7.5 and 8.5 percent, sugar and sweets prices between 6.5 and 7.5 percent, cereal and bakery product prices between 10.0 and 11.0 percent, and other food prices between 10.0 and 11.0 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 milk, wholesale dairy, and wholesale wheat flour were revised upward this month. No forecast ranges were revised downward.
Wholesale poultry prices increased by 5.2 percent between April and May 2022, largely due to high costs of energy, feed, and labor. 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 20.0 and 23.0 percent in 2022.
Farm-level milk prices increased by 4.4 percent, while wholesale dairy prices increased by 1.3 percent in May 2022 on strong domestic and international demand. Farm-level milk prices are predicted to increase between 30.0 and 33.0 percent, and wholesale dairy prices are predicted to increase between 14.0 and 17.0 percent in 2022.
Wholesale wheat prices rose by 4.0 percent in May 2022. The conflict in Ukraine has contributed to high wheat prices. Wholesale wheat flour prices are now predicted to increase between 23.0 and 26.0 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, 2019 through 2022 for data files.