Food Price Outlook, 2023 and 2024
This page summarizes the September 2023 forecasts, which incorporate the August 2023 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, rose by 0.4 percent from July 2023 to August 2023 and was up 3.7 percent from August 2022. The CPI for all food increased 0.2 percent from July 2023 to August 2023, and food prices were 4.3 percent higher than in August 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 0.1 percent from July 2023 to August 2023 and was 3.0 percent higher than August 2022; and
- The food-away-from-home (restaurant purchases) CPI increased 0.3 percent in August 2023 and was 6.5 percent higher than August 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 5.8 percent, with a prediction interval of 5.4 to 6.2 percent. Food-at-home prices are predicted to increase 5.1 percent, with a prediction interval of 4.6 to 5.8 percent. Food-away-from-home prices are predicted to increase 7.1 percent, with a prediction interval of 6.9 to 7.4 percent. Food prices are expected to continue to decelerate but not decline in 2024. In 2024, all food prices are predicted to increase 2.2 percent, with a prediction interval of -2.6 to 7.3 percent. Food-at-home prices are predicted to increase 1.6 percent, with a prediction interval of -5.5 to 9.5 percent, and food-away-from-home prices are predicted to increase 4.3 percent, with a prediction interval of 1.9 to 6.8 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 2009–19, 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 USDA 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).
Year-over-year price increases continued to slow for all food and for food at home. Food-at-home prices were 3.0 percent higher in August 2023 compared to August 2022, the lowest year-over-year increase since August 2021. Year-over-year price growth slowed across 10 food-at-home categories, and prices declined for 6 food-at-home categories between July and August 2023.
In August 2023, prices for unprocessed agricultural commodities continued to decline from their peak in May 2022, and in September 2023, the Board of Governors of the Federal Reserve System left the Federal funds (interest) rate unchanged at 5.5 percent. In another event impacting world food prices, Russia withdrew from the Black Sea Grain Initiative in July, an agreement that had allowed Ukraine to export grain and other agricultural exports from designated ports. These events will be closely monitored to assess their impacts on food prices.
Retail egg prices decreased 2.5 percent from July 2023 to August 2023, falling 18.2 percent below August 2022 prices. The recent outbreak of HPAI reduced the U.S. egg-layer flock, as well as the poultry flock to a lesser extent. The outbreak contributed to elevated egg and poultry prices as over 58 million birds, 325 commercial flocks, and 47 States were affected. Retail egg prices have declined over 38 percent from their peak in January 2023 in the absence of a confirmed case of HPAI in commercial egg layers since December 2022. Egg prices are predicted to increase 0.1 percent in 2023, with a prediction interval of -3.2 to 4.0 percent.
Prices are expected to continue rising for 11 food-at-home categories in 2023. In 2023, prices are predicted to increase for beef and veal (3.7 percent), other meats (4.1 percent), poultry (3.3 percent), fish and seafood (1.0 percent), dairy products (3.9 percent), fats and oils (9.2 percent), processed fruits and vegetables (8.6 percent), sugar and sweets (9.4 percent), cereals and bakery products (8.8 percent), nonalcoholic beverages (7.5 percent), and other foods (7.2 percent). The prediction intervals of each of these categories are strictly above zero.
Prices decreased 0.4 percent for fresh fruits and 0.1 percent for fresh vegetables from July 2023 to August 2023. Neither decrease in prices was attributable to seasonal factors. Prices for fresh fruits and vegetables are predicted to continue their slow growth relative to other categories from 2022. Prices for fresh fruits are predicted to increase 0.1 percent in 2023, with a prediction interval of -1.2 to 1.6 percent. Fresh vegetables prices are predicted to increase 1.0 percent in 2023, with a prediction interval of -0.5 to 2.6 percent.
Pork prices rose by 1.8 percent in August 2023 but remained 1.9 percent below August 2022 prices. Pork prices are predicted to decrease 1.1 percent in 2023, with a prediction interval of -2.7 to 0.4 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
Prices declined between July and August 2023 for six PPI categories and rose for seven categories. Greater volatility in farm- and wholesale-level prices lead to much wider initial prediction intervals for each of these products. The midpoints of the 2023 prediction intervals (representing the expected price change in 2023) of 11 PPI categories are negative and 2 are positive.
Farm-level cattle prices rose 1.6 percent and wholesale beef prices decreased 3.3 percent in August 2023, and they were 28.1 percent and 16.3 percent higher than August 2022, respectively. Price increases are due to tightening cattle supplies. Farm-level cattle prices are predicted to increase 23.9 percent in 2023, with a prediction interval of 19.5 to 28.9 percent. Wholesale beef prices are predicted to increase 12.8 percent in 2023, with a prediction interval of 6.9 to 19.8 percent.
Wholesale pork prices increased by 1.5 percent in August 2023 but remained 2.6 percent below August 2022. Wholesale pork prices are predicted to decrease 4.1 percent in 2023, with a prediction interval of -7.4 to -0.2 percent.
Prices for farm-level eggs increased by 6.3 percent from July 2023 to August 2023, following a large decrease between January and May 2023. Prices in August 2023 were only slightly higher than prices in January 2022 prior to the HPAI outbreak in wholesale egg markets. Farm-level egg prices are predicted to decrease 32.0 percent in 2023, with a prediction interval of -38.8 to -20.0 percent. Egg prices are the most volatile category tracked by USDA, ERS, leading to a wide prediction interval.
Farm-level soybean prices decreased 9.2 percent in August 2023, falling to 11.4 percent lower than August 2022. Wholesale fats and oils prices increased 5.1 percent in August 2023, but were 19.3 percent below August 2022. Farm-level soybean prices are predicted to decrease 7.5 percent in 2023, with a prediction interval of -12.2 to -2.0 percent. Wholesale fat and oil prices are predicted to decrease 15.2 percent in 2023, with a prediction interval of -17.1 to -13.0 percent.
Prices for farm-level vegetables declined 11.5 percent in August 2023 and were 2.7 percent lower than August 2022. Farm-level vegetable prices are predicted to decrease 6.3 percent in 2023, with a prediction interval of -13.8 to 3.7 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.