Summary Findings

Food Price Outlook, 2023

This page summarizes the March 2023 forecasts, which incorporate the February 2023 Consumer Price Index and Producer Price Index numbers.

See the Overview page for Consumer Price Index and Producer Price Index data sets.

Note: The Food Price Outlook data series and forecasting methodology were revised in January 2023 based on the approach documented in the following report. As of January 2023, the Food Price Outlook Summary Findings are based on the revised data series. Forecasts using the prior forecasting methodology remain available as data files (“Legacy Data”). USDA, ERS will continue to produce new monthly forecasts using both the updated methods and the legacy methods through June 2023.

Time-Series Methods for Forecasting and Modeling Uncertainty in the Food Price Outlook

Consumer Price Index for Food (not seasonally adjusted)

The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, rose by 0.6 percent from January 2023 to February 2023 and was up 6.0 percent from February 2022. The CPI for all food increased 0.4 percent from January 2023 to February 2023, and food prices were 9.5 percent higher than in February 2022.

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 0.3 percent from January 2023 to February 2023 and was 10.2 percent higher than February 2022; and
The food-away-from-home (restaurant purchases) CPI increased 0.6 percent in February 2023 and was 8.4 percent higher than February 2022.

Food prices are expected to grow more slowly in 2023 than in 2022 but still at above-historical average rates. In 2023, all food prices are predicted to increase 7.5 percent, with a prediction interval of 5.5 to 9.6 percent. Food-at-home prices are predicted to increase 7.8 percent, with a prediction interval of 5.3 to 10.5 percent. Food-away-from-home prices are predicted to increase 8.3 percent, with a prediction interval of 7.2 to 9.3 percent.

Recent Historical Overview

Between the 1970s and early 2000s, food-at-home prices and food-away-from-home prices increased at similar rates. However, between 2009–2019, their growth rates diverged; while food-at-home prices deflated in 2016 and 2017, monthly food-away-from-home prices rose consistently. Differences between the costs of serving prepared food at restaurants and retailing food in supermarkets and grocery stores partly explains this difference.

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 their prices in 2020.

In 2022, food prices increased by 9.9 percent. Food-at-home prices increased by 11.4 percent, while food-away-from-home prices increased by 7.7 percent. All food price categories tracked by USDA, ERS increased by more than 5 percent, and all food categories grew faster than their historical average rate. Following an outbreak of Highly Pathogenic Avian Influenza (HPAI), egg prices had the largest price increase (32.2 percent) between 2021 and 2022 of any category tracked by USDA, ERS. Beef and veal prices increased the least (5.3 percent) between 2021 and 2022 and generally declined from peak prices in November 2021.

CPI Forecast Changes This Month

The primary forecasting methodology used in the USDA Food Price Outlook changed between December 2022 and January 2023. Data using legacy methods will continue to be published alongside the primary methods but will not be reported in the Summary Findings. The updated primary methods are based entirely on statistical models that are fitted to recent trends in the data. These methods provide wider initial prediction intervals that narrow over the forecast period as more data become available and the degree of uncertainty declines. Discussions of price changes will focus on the midpoint of these forecast intervals (titled “Mid” in the workbooks) and use the lower and upper bounds of a 95-percent prediction interval (based on past data, the 2023 level of inflation is expected to fall in this interval 19 out of 20 times) to reflect the level of uncertainty (titled “Lower” and “Upper” in the workbooks, respectively).

Price increases for all food and food at home were lower in February 2023 than January 2023, and their year-over-year price increases continued to decline. Food-away-from-home prices again increased by 0.6 percent from January 2023 to February 2023, and its year-over-year price increased slightly from January 2023. Prices increased for 13 food-at-home categories between January 2023 and February 2023. Prices increased for all categories except fresh vegetables and eggs. The continuing increases in the Federal funds (interest) rate by the Federal Reserve placed downward pressure on prices, and prices for unprocessed agricultural commodities have decreased since peaking in May 2022. The effects of these conditions will be closely monitored as they unfold to assess their impacts on food prices.

Retail egg prices decreased 6.7 percent in February 2023 but remained 55.4 percent above February 2022 prices. The ongoing outbreak of HPAI has reduced the U.S. egg-layer flock, as well as the poultry flock to a lesser extent. The outbreak has contributed to elevated egg and poultry prices as over 58 million birds, 322 commercial flocks, and 47 States have been affected. Wholesale and retail egg prices have declined without a confirmed case of HPAI in egg layers between December 21, 2022, and March 23, 2023. Price impacts of the outbreak will be monitored closely. Egg prices are predicted to increase 29.6 percent in 2023, with a prediction interval of 13.4 to 48.9 percent. This wide prediction interval reflects the volatility in retail egg prices.

Prices are expected to continue increasing for nine additional food categories that experienced consistent growth throughout 2022. In 2023, prices are predicted to increase for other meats (4.5 percent), poultry (3.4 percent), dairy products (6.4 percent), fats and oils (15.4 percent), processed fruits and vegetables (11.4 percent), sugar and sweets (11.1 percent), cereals and bakery products (11.7 percent), nonalcoholic beverages (10.7 percent), and other foods (8.5 percent). The prediction intervals of each of these categories are strictly above zero.

Price decreases are expected for two price categories. Beef and veal prices are predicted to decrease 1.0 percent in 2023, with a prediction interval of -7.5 to 6.2 percent, and pork prices are predicted to decrease 0.8 percent in 2023, with a prediction interval of -6.6 to 5.6 percent.

Prices for fresh fruits and vegetables are predicted to continue their relatively slow growth from 2022. Fresh fruits prices are predicted to increase 0.6 percent in 2023, with a prediction interval of -3.9 to 5.6 percent. Fresh vegetables prices decreased 1.1 percent in January 2023 and 2.0 percent in February 2023. These declines were only partially attributable to seasonal factors. Fresh vegetables prices are predicted to increase 1.3 percent in 2023, with a prediction interval of -5.1 to 8.0 percent.

Producer Price Index 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.

USDA, ERS 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

Greater volatility in farm- and wholesale-level prices lead to much wider initial prediction intervals for each of these products. The midpoints of the prediction intervals (representing the expected price change in 2023) of eight PPI categories are negative and five are positive.

Wholesale poultry prices flattened in recent months following large declines from June through December 2022. Strong production, increasing supplies, and changing trade patterns generally drove poultry prices down in the final quarter of 2022, despite the ongoing outbreak of HPAI. Farm-level egg prices fell 20.1 percent in January 2023 and 36.1 percent in February 2023 after jumping 30.2 percent in December 2022 and 19.6 percent in November 2022. Egg prices remain high—64.3 percent higher than February 2022. HPAI continues to affect the egg-layer flock. Wholesale poultry prices are predicted to decrease 10.4 percent in 2023, with a prediction interval of -18.1 to -1.5 percent. Farm-level egg prices are predicted to decrease 27.8 percent in 2023, with a prediction interval of -49.2 to 10.5 percent. Egg prices are the most volatile category tracked by USDA, ERS, leading to a wide prediction interval.

Farm-level milk prices declined 7.3 percent in February 2023, with higher milk production, larger supplies of cheese, and softness in demand slowing prices. Farm-level milk prices are predicted to decrease 17.4 percent in 2023, with a prediction interval of -33.9 to 6.4 percent.

Farm-level vegetable prices fell by 33.5 percent in January 2023 and 13.6 percent in February 2023 as supplies recovered from inclement weather impacts in 2022. Farm-level vegetable prices were 26.2 percent above February 2022. Farm-level vegetable prices are predicted to decrease 4.5 percent in 2023, with a prediction interval of -22.2 to 18.8 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 the Overview page for Consumer Price Index and Producer Price Index data sets.