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2021 retail food price inflation continued at same pace as 2020, but varied among food categories

Friday, January 28, 2022

Retail food prices increased by 3.5 percent in 2021, equal to the rate in 2020 and greater than the historical annual average of 2.0 percent from 2000 to 2019. Of the 12 food categories depicted in the chart, six showed slower price increases in 2021 compared with 2020. Dairy products and fresh vegetables, in particular, had significantly slower price increases in 2021 than 2020 and their historical averages. Dairy product prices increased at 1.4 percent in 2021 versus 4.4 percent in 2020 and fresh vegetable prices increased by 1.1 percent compared to 2.6 percent is 2020. Conversely, prices in six food categories increased in 2021 at a faster rate than in 2020 as well as in years prior. Prices for fresh fruits, for instance, increased 5.5 percent in 2021 compared to a 0.8-percent decrease in 2020 and a 1.6-percent average increase over the prior 20 years. Inflationary pressures differ by food category. For example, meat prices, which rose the most of any included product groups, have been driven up by strong domestic and international demand, high feed costs, and supply chain disruptions. Winter storms and drought impacted meat prices in the spring, and processing facility closures due to cybersecurity attacks affected beef and other meat production in May. USDA, Economic Research Service (ERS) researchers project that prices for food-at-home, or food purchased typically from grocery stores or other food stores, will increase between 1.5 and 2.5 percent in 2022, lower than the 3.5-percent increase that occurred in both 2020 and 2021. Forecasts for all food categories for 2022 are available in ERS’s monthly Food Price Outlook data product, updated January 25, 2022.

Wheat and wheat flour prices surge, while prices remain stable for bread, cereal, and bakery products

Monday, January 3, 2022

Wheat prices at the farm level rose substantially in 2021, but these changes did not result in correspondingly higher prices for consumer products made from wheat. This disparity reflects the historical pattern most observable from 2005–12, wherein the degree of movement in prices of wheat products was markedly less than the more dramatic changes in wheat prices. Cash wheat prices in Kansas City, MO—the market price that most closely reflects the prices mills pay for wheat—were up by more than 30 percent in 2021 from the same time in 2020. Similarly, the Producer Price Index (PPI) for flour milling—a measure of how wholesale flour prices change over time—also rose, registering an 18-percent year-on-year increase in 2021. In contrast, prices U.S. consumers paid for wheat-containing products, as measured by the Consumer Price Index (CPI), for cereal and bakery products, is projected up 2 percent. This year-to-year increase is below the overall inflation rate for 2021 and similar to the previous year’s gains. The muted and lagged impact of the wheat grain price surge on consumer product prices is in line with historical precedent in which commodity prices usually represent a small share of the consumer food dollar that is spent on processed foods such as bread and pasta. This chart was drawn from “The Effect of Rising Wheat Prices on U.S. Retail Food Prices,” which appeared in the USDA, Economic Research Service’s November 2021 Wheat Outlook.

Apple pie takes a larger slice of Thanksgiving food budgets in 2021

Monday, November 22, 2021

As U.S. consumers finalize their Thanksgiving menus, they might be curious to know how much ingredients will likely cost. If a homemade apple pie is on the menu, consumers can expect to pay about $7.32 for the ingredients, more than half of which ($4.22) is for apples. The same pie ingredients cost about $6.75 last year, meaning the total cost is 8.4 percent higher this year. The cost increase is driven by the price of Granny Smith apples, which increased from an average $1.26 per pound in October 2020 to $1.41 per pound in October 2021. Sugar, eggs, butter, and lemons also increased in price over the same period, while flour prices decreased. If the apple pie is served a la mode, plan to factor in an additional $0.31 per scoop, the same price as in 2020. USDA, Economic Research Service used average price data from the U.S. Bureau of Labor Statistics and USDA, Agricultural Marketing Service Weekly Advertised Fruit and Vegetable Retail Price data to derive the cost for the ingredients of an apple pie. The most recent data points are from October, meaning prices for Thanksgiving week may vary; savings may occur if grocers offer holiday discounts. Forecasts for aggregate food category prices can be found in the Food Price Outlook data product, which will next be updated on November 23.

Most food categories have experienced slower price increases in 2021 compared with 2020

Wednesday, July 28, 2021

Retail food prices have increased 1.6 percent in the first six months of 2021, less than the rate over the same period last year (2.9 percent) and equal to the historical average over the same six months from 2000 to 2019. Of the 13 food categories depicted in the chart, 10 have experienced slower price increases so far in 2021 compared with halfway through 2020, while 5 categories trailed their historical midyear average price increases. In the first six months of 2021, prices for five food categories increased at a rate slower than in 2020 and years prior: eggs, dairy, fresh vegetables, cereals and bakery products, and “other foods.” Conversely, prices for three food categories increased in the first six months of 2021 at a rate faster than in 2020 and in years prior: fresh fruits (4.8 percent), fish and seafood (2.5 percent), and fats and oils (1.9 percent). Inflationary pressures differ by food category. For example, fresh fruit prices currently are increasing more than four times faster than their historical average rate because of low citrus supplies and increased exports. Prices may change during the remainder of 2021; in the second half of 2020, prices increased for all food categories except eggs and the category of beef and veal. USDA, Economic Research Service (ERS) researchers project food-at-home prices will increase between 2 and 3 percent in 2021. Forecasts for all food categories, including for 2022, are available in ERS’s monthly Food Price Outlook data product, updated July 23, 2021.

Cost of a home-grilled cheeseburger up 11 cents from 2019

Tuesday, June 29, 2021

For Fourth of July cookouts this year, cheeseburgers could be a bit pricier than they were in 2019. The latest available prices from May 2021 show the ingredients for a home-prepared quarter-pound cheeseburger totaled $1.89 per burger, with ground beef making up the largest cost at $1.03 and cheddar cheese accounting for $0.34. This same cheeseburger would have cost $1.78 to prepare in May 2019, an increase of 6.3 percent. Retail prices for one-pound quantities of all ingredients, except tomatoes, were higher in May 2021 compared with May 2019. USDA, Economic Research Service (ERS) is using 2019 for comparison because 2020 was an unusual year for food prices. Higher ground beef prices accounted for more than half the 11-cent increase between 2019 and 2021, while cheddar cheese costs were 1 cent more per burger in May 2021. Bread and iceberg lettuce prices rose the fastest—17.2 and 11.4 percent, respectively—but these ingredients represented a relatively small portion of the total cost of a burger. Bread and lettuce added 4 cents to a burger’s total cost in 2021. Tomato prices remained roughly the same over this period. This chart uses data from the ERS Food Price Outlook data product.

Costs of major foodborne illnesses in the United States increased to $17.6 billion in 2018

Monday, June 21, 2021

The USDA, Economic Research Service (ERS) estimates that inflation and income growth drove up the costs resulting from 15 foodborne illnesses in the United States by $2 billion from $15.5 billion in 2013 to $17.6 billion in 2018. For this estimate, ERS included medical care costs, the value of lost earnings, and a monetary measure of death based on individuals' willingness to pay to reduce the risk of dying from foodborne illness. The biggest factor behind the increase in the overall costs of foodborne illnesses was the effect of inflation and income growth on the value people place on preventing deaths. However, the value of prevented deaths as a share of overall costs decreased slightly in 2018 compared to 2013 due to the substantial inflation in medical costs. Health effects from foodborne illness can vary by pathogen (bacteria, viruses, and parasites), ranging from a few days of diarrhea to more serious outcomes, such as kidney failure, cognitive impairment, and even death. Determining the overall costs of these health effects provides a common metric to compare impacts of different pathogens, a way to aggregate impacts across illnesses, and a means of comparing the costs of experiencing those illnesses with the costs of preventing them. More information can be found in the ERS’s updated Cost Estimates of Foodborne Illnesses data product. This chart appears in the ERS’s Amber Waves article, “Economic Cost of Major Foodborne Illnesses Increased $2 Billion From 2013 to 2018,” April 2021.

Retail food price inflation rate likely to decrease in 2021

Wednesday, February 17, 2021

Food prices increased more rapidly than average in 2020, as the COVID-19 pandemic prompted shifts in consumption patterns and supply chain disruptions. However, researchers at the USDA, Economic Research Service (ERS) expect food price inflation to retreat over the course of 2021 and converge closer to the 20-year historical average. During the pandemic, supply chains pivoted from servicing restaurants to stocking retailers, primarily grocery stores. COVID-19 outbreaks disrupted agricultural production and processing, particularly in the meat sector, leading to reduced supply and higher prices. Societal and economic response to the pandemic will continue to influence food prices in 2021, and uncertainties about the future of disease transmission, stay-at-home orders, and vaccinations introduce challenges to forecasting food price inflation. Restaurant re-openings, supply chain adjustments, rates of unemployment, and shifting safety net programs may all affect food prices. Over time, inflation tends to revert to historical averages as years of high rates of inflation are often succeeded by years of low inflation. The years following the 2008 and 2011 price spikes offer examples of this pattern. This trend suggests food price inflation rates are likely to decrease in the wake of the COVID-19 pandemic, but there is substantial uncertainty about the rate of decline. Using data from the U.S. Bureau of Labor Statistics’ Consumer Price Index, ERS researchers project retail food prices will increase between 1 and 2 percent in 2021, at or below the 20-year average of 2 percent. More information on ERS’s monthly food price forecasts can be found in the ERS Food Price Outlook data product, which will be updated February 25, 2021.

Food-at-home price inflation varies across U.S. metro areas

Wednesday, January 13, 2021

From 2010 through 2019, retail—or grocery—food prices rose an average of 1.2 percent a year nationally. However, food-at-home price inflation varies by locality. Retail food prices rose an average of 1.7 percent a year in Honolulu over the decade, while price inflation in the Dallas-Fort Worth area averaged 0.6 percent a year. Averaging 10 years of annual data smooths out year-to-year “noise”—volatile price swings that are not indicative of the overall trend. Differences in transportation costs and retail overhead expenses, such as labor and rent, can explain some of the variation among cities because retailers often pass local cost increases on to consumers in the form of higher prices. Furthermore, differences in consumer preferences among cities for specific foods may help explain variation in inflation rates. For example, a city whose residents strongly prefer foods with less price inflation (such as fresh fruits and vegetables at 1.1 percent a year in 2010–19) might experience lower food-at-home price inflation than a city whose residents buy more beef and veal, which increased an average of 3.6 percent a year in 2010–19. This chart appears in an Economic Research Service data visualization, Food Price Environment: Interactive Visualization, released September 2020.

As of August, food-at-home prices in 2020 were above 2019 levels

Wednesday, September 30, 2020

Grocery store food prices—or food-at-home prices—were 4.6 percent higher in August 2020 than a year earlier. Changes in food-at-home prices are measured by the Consumer Price Index (CPI) for Food at Home. The CPI for Food at Home looks at prices for a specific set of grocery store foods and beverages bought in cities around the country and compares the price of this “market basket,” or indexes it, to 1982-84 prices. Indexing provides information on cumulative changes in food prices over time, answering the question: How much higher are food prices this year compared with last year or past years? Over January to December 2019, the monthly price index for food at home ranged from 241.2 to 242.6, indicating prices rose or fell by no more than 0.6 percent per month. Monthly food-at-home prices in 2020 display a different pattern. Food-at-home prices rose by an average of 0.5 percent in January, February, and March, followed by a jump of 2.7 percent in April and a continued rise in May and June. In July and August, prices fell by 1.0 and 0.1 percent, respectively. Even so, food-at-home prices remained higher than during the previous year. For context, annual inflation for food at home has averaged around 2 percent for the past 20 years. Food-at-home prices in 2020 were influenced by the coronavirus pandemic. The pandemic put pressure on several food industries, disrupting supply chains for commodities including dairy, beef, pork, and poultry. For a closer look at specific food categories, explore the Economic Research Service (ERS) Chart of Note on retail price changes between June 2019 and June 2020. The data for both charts come from the ERS’s Food Price Outlook data product.

Retail prices for nearly all food-at-home categories up in June 2020 compared with June 2019

Monday, July 27, 2020

Grocery store prices were 5.6 percent higher in June 2020 compared with June 2019. Retail prices increased for all food-at-home categories except for fresh fruits. Many of these increases were influenced by the coronavirus pandemic. The pandemic disrupted supply chains of several commodities—and affected consumers’ food spending patterns—which put upward pressure on wholesale and retail food prices. The spring 2020 closing of schools and stay-at-home orders resulted in the dairy industry having to shift from supplying products for schools and restaurants to supplying products for grocery stores and other food retailers (food at home). Adapting to this transition placed upward pressure on retail prices for dairy products, which rose by 5.1 percent from June 2019 to June 2020. Beef also experienced supply chain disruptions: decreased slaughter volumes due to COVID-19 led to a bottleneck in supply which boosted prices. Retail beef and veal prices in June 2020 were 25.1 percent higher than in June 2019. Much of this increase occurred after February 2020. Other commodities also saw increases in retail prices. Egg prices increased 12.1 percent since June 2019, and pork and poultry prices increased 11.8 and 8.7 percent, respectively. The data for this chart come from the Economic Research Service’s Food Price Outlook data product, updated July 24, 2020.

2020 inflation in grocery store food prices expected to remain low

Thursday, February 20, 2020

Grocery store food prices in the United States have seen low inflation or deflation since 2015. Given current conditions, ERS expects a continuation of the low inflation trend into 2020. Food-at-home prices are forecast to increase between 0.5 and 1.5 percent, below the current 20-year historic average of 2.0 percent. The previous period of low inflation in retail food prices, which occurred in 2009 and 2010, was due largely to the economy-wide downturn caused by the 2007-09 Great Recession. The current period of low food-price inflation, however, is taking place during a time of U.S. economic expansion. Contributing factors for this period of low food-price inflation include retail pricing strategies, efficient food supply chains, slow wage growth, and relatively low oil prices. Within grocery sub-categories, price changes in 2020 are expected to vary. More information on ERS’s monthly food price forecasts can be found in the ERS Food Price Outlook data product, which will be updated on February 25, 2020.

ICYMI... Inflation in grocery store food prices varies across U.S. metropolitan areas

Tuesday, September 24, 2019

Between 2009 and 2018, retail food prices rose an average of 1.2 percent per year nationally. However, food-at-home price inflation varies by geographic location. Over the same 10-year period, retail food prices rose an average of 1.7 percent per year in St. Louis, while prices in Dallas rose on average 0.6 percent per year. Averaging 10 years of annual data smooths out year-to-year “noise”—volatile price swings that obscure the bigger picture of relative food price increases by city. Different rates of change in transportation costs and retail overhead expenses, such as labor and rent, can explain some of the variation among cities because cost increases are often passed along to the consumer in the form of higher grocery prices. Furthermore, differences in consumer food preferences among cities for specific foods may help explain variation in inflation rates. For example, a city whose residents strongly preferred foods with little price inflation (such as pork and poultry at 1.4 and 1.5 percent per year, respectively, in 2009–2018) might have had a lower 10-year average inflation level than a city whose residents purchased more beef or veal, which increased an average of 3.4 percent per year in 2009–2018. This chart appears in an ERS data visualization, Food Price Environment: Interactive Visualization, released March 2019. This Chart of Note was originally published March 28, 2019.

Cost of a home-grilled cheeseburger up 8 cents from last year

Monday, July 1, 2019

If your July 4 cookout includes cheeseburgers, they will be a bit pricier than last year’s burgers. In May 2019 (latest available prices), the ingredients for a home-prepared quarter-pound cheeseburger totaled $1.75 per burger, with ground beef making up the largest cost at $0.96 and cheddar cheese accounting for $0.33. This same cheeseburger would have cost $1.67 to prepare in May 2018, an increase of 4.8 percent. Retail prices for one pound quantities of all of the ingredients, with the exception of bread, were higher in May 2019 compared with May 2018. Higher ground beef prices accounted for half of the 8-cent increase between 2018 and 2019, and cheddar cheese costs were 1 cent more per burger in May 2019. Iceberg lettuce and tomato prices rose the most—14.5 and 8.8 percent, respectively—but the small amount of these toppings added just 3 cents to per burger costs. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated June 25, 2019.

Inflation in grocery store food prices varies across U.S. metropolitan areas

Thursday, March 28, 2019

Between 2009 and 2018, retail food prices rose an average of 1.2 percent per year nationally. However, food-at-home price inflation varies by geographic location. Over the same 10-year period, retail food prices rose an average of 1.7 percent per year in St. Louis, while prices in Dallas rose on average 0.6 percent per year. Averaging 10 years of annual data smooths out year-to-year “noise”—volatile price swings that obscure the bigger picture of relative food price increases by city. Different rates of change in transportation costs and retail overhead expenses, such as labor and rent, can explain some of the variation among cities because cost increases are often passed along to the consumer in the form of higher grocery prices. Furthermore, differences in consumer food preferences among cities for specific foods may help explain variation in inflation rates. For example, a city whose residents strongly preferred foods with little price inflation (such as pork and poultry at 1.4 and 1.5 percent per year, respectively, in 2009–2018) might have had a lower 10-year average inflation level than a city whose residents purchased more beef or veal, which increased an average of 3.4 percent per year in 2009–2018. This chart appears in an ERS data visualization, Food Price Environment: Interactive Visualization, released March 2019.

2019 inflation in grocery store food prices expected to exceed that of 2018

Thursday, February 21, 2019

Over the last decade, grocery store food prices in the United States have had their ups and downs, with average annual prices decreasing as much as 1.3 percent in 2016 and increasing as much as 4.8 percent in 2011. Lower retail food price inflation in 2009 and 2010 reflected the economywide downturn caused by the Great Recession of 2007-09. Food-at-home prices rebounded in 2011 and rose between 0.9 and 2.5 percent annually in 2012-15. In 2016 and 2017, however, retail food prices declined because of increases in farm- and wholesale-level production, lower prices for oil and other production inputs, as well as exchange rates that made imported foods less expensive. In 2018, retail food prices rose 0.4 percent. ERS expects retail food prices to continue this upward trend in 2019, with overall food-at-home prices forecast to increase between 1 and 2 percent. Consumers can expect some variation among grocery subcategories. For instance, retail dairy prices are expected to rise between 3 and 4 percent, while prices for fats and oils are expected to decrease by between 2 and 3 percent. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated February 21, 2019.

Prices for most baking ingredients decline in 2018

Tuesday, December 18, 2018

This holiday season, baking essentials could cost less than they did last year. A basket comprising a dozen eggs, a 1-pound container of margarine, a 5-pound bag of flour, 4-pound bag of sugar, and a gallon of whole milk cost $10.85 in October 2018 compared to $11.57 in October 2017, a decrease of 6.2 percent. This decrease is driven by lower prices in 2018 across four of the five foods. The largest savings are found in flour, sugar, and milk—flour prices are down 9.4 percent, sugar prices fell 9.3 percent, and whole milk prices are 7.8 percent lower. Egg prices, on the other hand, increased 7.8 percent or 12 cents per dozen. Due in part to prices adjusting from lows in 2016 and 2017, egg prices have been moving upward in much of 2018. However, additional savings could be found in December as grocers often offer discounts on holiday food items. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated November 21, 2018.

Food prices less volatile than transportation prices

Wednesday, July 18, 2018

The 1970s were a decade of volatile prices for consumers’ top three spending categories—housing, transportation, and food. Annual food price inflation during the 1970s averaged 8.1 percent, and food prices rose by 10 percent or more in 3 of the 10 years. Yearly price changes for housing costs, which include rents, utilities, and household furnishings, averaged 7.6 percent during the decade and peaked at 15.7 percent in 1980. And price changes for transportation (prices of vehicles, gasoline and diesel fuel, and public transportation) topped 10 percent in 1974, 1976, and 1979 and jumped 17.9 percent in 1980. Since that time, prices for food and housing have become comparatively more stable than transportation prices, which continue to be volatile from year to year. Food prices in 2016 and 2017 changed little as decreasing prices for food commodities and energy offset rising costs for other food processing, marketing, and food service inputs. At the same time, a strong U.S. dollar lowered the cost of imported foods. This chart appears in “Five Decades of Price Swings for Food and Other Consumer Spending Categories” in the July 2018 issue of ERS’s Amber Waves magazine.

Home-grilled cheeseburger costs are beefier today than they were 20 years ago

Monday, July 2, 2018

If cheeseburgers are on your menu for July 4, they will cost you 20 percent more than their inflation-adjusted cost from 20 years ago. And that greater cost is due to higher ground beef prices. In 2018, the ingredients for a home-prepared, quarter-pound cheeseburger total $1.69, with ground beef making up the largest cost at $0.92. This same cheeseburger would have cost $0.91 to prepare in 1998, the equivalent of $1.40 in 2018 dollars, with ground beef accounting for $0.55 in 2018 dollars. Today’s higher ground beef prices in grocery stores likely reflect cattle supply disruptions in the early 2000s and early 2010s, resulting in higher-than-average increases in retail ground beef prices during those years. Although U.S. beef production has since increased, prices are slower to retreat at the retail level. In contrast, efficiencies throughout the food supply chain helped lower prices for the other cheeseburger ingredients. Inflation-adjusted retail bread prices between 1998 and 2018 fell by 2.8 percent, tomato prices by 12.3 percent, lettuce prices by 27.9 percent, and cheddar cheese prices by 5.7 percent. More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated June 25, 2018.

Recent food price inflation in line with overall inflation

Thursday, May 17, 2018

From 2013 to 2017, the Consumer Price Index (CPI) for all food (grocery store and restaurant food) rose by 5.5 percent. This increase was relatively in line with the 5.2-percent rise in the all-items CPI, indicating that food prices were rising only moderately faster than prices for consumer goods and services as a whole. Over the last couple years, rising restaurant prices have contributed to food price inflation outpacing prices for recreation, education and communication, apparel, and transportation. Apparel and transportation prices actually declined from 2013 to 2017. Medical care and housing were the only two major consumer spending categories whose prices rose faster than food prices during this time period. Food-price inflation outpacing economy-wide inflation is not a recent phenomenon. Over the last decade, food-price inflation averaged 2.1 percent per year and overall inflation averaged 1.7 percent per year. Price inflation for food at home, however, averaged 1.8 percent per year during 2013-17, in line with economy-wide inflation. This chart appears in ERS’s data product, Ag and Food Statistics: Charting the Essentials.

Retail price changes for most food categories were small in 2017

Tuesday, April 24, 2018

With the exception of eggs, 2017 was a year of relative stability for grocery store prices. Lower agricultural commodity prices and a relatively strong U.S. dollar (which can make imported foods less expensive) contributed to smaller than average price increases and, for some foods, price decreases. The largest increase was for fish and seafood prices, which rose 1.2 percent—still well below the category’s 20-year historical average of 2.5 percent per year. Beef and veal prices fell 1.2 percent, cereals and bakery products were down 0.5 percent, and retail prices for sugars and sweets and fresh vegetables both fell by 0.1 percent in 2017. The food category with the largest price change in 2017 was eggs—a category prone to yearly price swings. Retail egg prices fell 9.5 percent in 2017, as egg production continued to recover from lows in 2015 due to the Highly Pathogenic Avian Influenza. Eggs account for 1.3 percent of food-at-home spending, so their large price swings have muted effects on overall grocery store inflation. This chart appears in an ERS data visualization, Food Price Environment: Interactive Visualization, released February 2018.