Food Price Outlook, 2024
This page summarizes the February 2024 forecasts, which incorporate the January 2024 Consumer Price Index and Producer Price Index numbers.
See the Overview page for Consumer Price Index and Producer Price Index datasets.
The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased 0.5 percent from December 2023 to January 2024 and was up 3.1 percent from January 2023. The CPI for all food increased 0.6 percent from December 2023 to January 2024, and food prices were 2.6 percent higher than in January 2023.
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 December 2023 to January 2024 and was 1.2 percent higher than January 2023; and
- The food-away-from-home (restaurant purchases) CPI increased 0.5 percent in January 2024 and was 5.1 percent higher than January 2023.
Food prices are expected to continue to decelerate in 2024. In 2024, all food prices are predicted to increase 2.9 percent, with a prediction interval of 0.5 to 5.3 percent. Food-at-home prices are predicted to increase 1.6 percent, with a prediction interval of -1.8 to 5.3 percent, and food-away-from-home prices are predicted to increase 5.0 percent, with a prediction interval of 3.7 to 6.3 percent.
The Food Price Outlook tracks and forecasts the annual percentage change in prices by averaging observed and forecast prices for all months in the current year compared to all months in the previous year. The Food Price Outlook forecasting methods are based entirely on statistical models that are fitted to recent trends in the data. These methods provide prediction intervals that narrow over the forecast period as more data become available and the degree of uncertainty declines. Discussions of price changes 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 annual 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). For a summary of forecasting methods used in the Food Price Outlook, see ERS Refines Forecasting Methods in the Food Price Outlook.
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 and 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 explain this difference.
In 2020, food-at-home prices increased 3.5 percent and food-away-from-home prices increased 3.4 percent. This convergence was largely driven by a rapid increase in food-at-home prices following the onset of the Coronavirus (COVID-19) pandemic, particularly for meats and poultry, while food-away-from-home price inflation remained similar to its 2019 inflation rate. In 2021, all food prices increased 3.9 percent as prices began accelerating in the second-half of the year. No food categories tracked by the U.S. Department of Agriculture (USDA), Economic Research Service (ERS) decreased in price in 2021 compared with their prices in 2020.
In 2022, food prices increased by 9.9 percent, faster than any year since 1979. Food-at-home prices increased by 11.4 percent, while food-away-from-home prices increased by 7.7 percent. Food prices rose partly due to a highly pathogenic avian influenza (HPAI) outbreak that affected egg and poultry prices and the conflict in Ukraine, which compounded other economy-wide inflationary pressures such as high energy costs. All food price categories increased by more than 5 percent, and all food categories grew faster than their historical average rate.
In 2023, food prices increased by 5.8 percent. Food price growth slowed in 2023 as economy-wide inflationary pressures, supply chain issues, and wholesale food prices eased from 2022. Food-at-home prices increased by 5.0 percent, and food-away-from-home prices increased by 7.1 percent. While prices increased for all food categories except for pork, prices grew more slowly in 2023 than in 2022 for all categories.
CPI Forecast Changes This Month
While food prices rose across most categories in January 2024, year-over-year price increases continued to slow for all food, food at home, and food away from home. Prices increased for all categories except beef and veal, pork, other meats, and fish and seafood in January 2024, and prices for five food-at-home categories rose by at least 1.0 percent from December 2023. Between January 2023 and January 2024, prices fell for five food-at-home categories: eggs, fish and seafood, dairy products, fresh vegetables, and pork. In 2024, prices for most food categories are predicted to change at a rate below their 20-year historical average. Prices are predicted to increase for 11 food-at-home categories and decrease for 4 food-at-home categories in 2024, though the measures of uncertainty do not rule out either an increase or decrease in prices in 2024 for most categories.
Beef and veal prices decreased 0.3 percent from December 2023 to January 2024 but remained 7.7 percent higher than January 2023 due to tight supplies and strong demand. Beef and veal prices are predicted to increase 2.2 percent in 2024, with a prediction interval of -5.6 to 10.7 percent. Pork prices also fell 0.3 percent in January 2024 due to weak demand and were down 0.4 percent from January 2023. Pork prices are predicted to decrease 0.5 percent in 2024, with a prediction interval of -7.3 to 6.8 percent.
Retail egg prices increased 1.8 percent in January 2024, following an increase of 8.9 percent in December 2023, but were 28.6 percent below January 2023 prices. An outbreak of HPAI that began in 2022 contributed to elevated egg prices by reducing the U.S. egg-layer flock. After egg prices peaked in January 2023, they declined or stabilized through much of 2023. However, prices have increased again in recent months after HPAI was confirmed in egg layers in November 2023 for the first time since December 2022. The outbreak affected almost 20 million birds in November and December 2023, but slowed to about 2 million in January and February 2024, and price impacts of the outbreak will be monitored closely. Egg prices are predicted to decrease 2.8 percent in 2024, with a prediction interval of -17.2 to 14.6 percent. This wide prediction interval reflects the volatility in retail egg prices.
Prices for fresh vegetables increased by 2.9 percent in January 2024 but were 0.9 percent lower than January 2023, when prices remained elevated following their series peak in December 2022. Fresh vegetables have historically experienced a seasonal peak in prices in the first quarter of each year. Prices for fresh vegetables are predicted to increase 1.9 percent in 2024, with a prediction interval of -3.0 to 7.0 percent.
Prices for fats and oils, sugar and sweets, and nonalcoholic beverages each rose by 1.0 percent or more from December 2023 to January 2024: 1.1 percent for fats and oils, 1.0 percent for sugar and sweets, and 2.2 percent for nonalcoholic beverages. Sugar and sweets and nonalcoholic beverages are expected to experience the highest price growth of all food-at-home categories in 2024 and have prediction intervals that are strictly above zero. Prices for fats and oils are predicted to increase 4.6 percent in 2024, with a prediction interval of -0.8 to 10.5 percent. Sugar and sweets prices are predicted to increase by 5.3 percent in 2024, with a prediction interval of 1.7 to 9.1 percent. Prices for nonalcoholic beverages are predicted to increase 4.9 percent in 2024, with a prediction interval of 1.6 to 8.4 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, processed foods and feeds, and finished consumer foods. These farm- and wholesale-level prices give a general sense of price movements across various stages of production in the U.S. food supply chain.
The PPIs 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
In 2024, prices are predicted to decrease for 12 PPI categories and to increase for 1 category, though the measures of uncertainty for all PPI categories do not rule out either an increase or decrease in prices in 2024. Greater volatility in farm- and wholesale-level prices lead to wider prediction intervals for these products compared to retail-level products.
Prices for farm-level eggs rose by 8.6 percent from December 2023 to January 2024. New cases of HPAI were confirmed in egg-layer flocks in November 2023 for the first time since December 2022, though fewer birds and flocks have been affected in early 2024 compared to November and December 2023. Prices in January 2024 were 52.2 percent lower than January 2023 following several months of large price decreases in early 2023. The effects of recent HPAI cases on farm-level egg prices will be closely monitored. Farm-level egg prices are predicted to decrease 1.9 percent in 2024, with a prediction interval of -47.8 to 106.6 percent. Egg prices are the most volatile category tracked by USDA, ERS, leading to a wide prediction interval.
Prices dropped for several farm-level products from December 2023 to January 2024. Prices for farm-level milk fell by 6.5 percent in January 2024 and were 16.6 percent lower than January 2023. Farm-level soybean prices declined by 6.3 percent, falling to 17.2 percent below January 2023. Prices for farm-level wheat decreased 3.3 percent and remained 24.2 percent lower than January 2023. Prices for farm-level milk are predicted to decrease 5.7 percent in 2024, with a prediction interval of -25.3 to 20.7 percent. Prices for farm-level soybeans are predicted to decrease 13.0 percent in 2024, with a prediction interval of -30.1 to 10.9 percent, and prices for farm-level wheat are predicted to decrease 16.2 percent in 2024, with a prediction interval of -34.7 to 8.1 percent.
In contrast, prices increased for farm-level fruits and farm-level vegetables from December 2023 to January 2024, by 3.7 percent and 9.6 percent, respectively. Despite a large increase in January 2024, prices for farm-level vegetables were 19.6 percent lower than January 2023. Farm-level fruits is the only PPI category predicted to increase in price in 2024. Prices for farm-level fruits are predicted to increase 4.0 percent in 2024, with a prediction interval of -6.8 to 16.4 percent, and prices for farm-level vegetables are predicted to decrease 3.1 percent in 2024, with a prediction interval of -23.9 to 24.5 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 datasets.