Food Price Outlook, 2022 and 2023
This page summarizes the November 2022 forecasts, which incorporate the October 2022 Consumer Price Index and Producer Price Index numbers.
See Changes in Food Price Indexes, 2020 through 2023 for data files.
NOTE: The Food Price Outlook is being revised based on the methodology documented in the following report. A revised data series is forthcoming in January 2023. The Food Price Outlook Summary Findings will be based on the revised data series after it is released.Time-Series Methods for Forecasting and Modeling Uncertainty in the Food Price Outlook
The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased by 0.4 percent from September 2022 to October 2022 and was up 7.7 percent from October 2021. The CPI for all food increased 0.7 percent from September 2022 to October 2022, and food prices were 10.9 percent higher than in October 2021.
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 0.5 percent from September 2022 to October 2022 and was 12.4 percent higher than October 2021; and
- The food-away-from-home (restaurant purchases) CPI increased 0.9 percent in October 2022 and was 8.6 percent higher than October 2021.
In 2022, food price increases are expected to be above the increases in 2020 and 2021. In 2022, all food prices are predicted to increase between 9.5 and 10.5 percent, food-at-home prices are predicted to increase between 11.0 and 12.0 percent, and food-away-from-home prices are predicted to increase between 7.0 and 8.0 percent. 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 between 3.0 and 4.0 percent, food-at-home prices are predicted to increase between 2.5 and 3.5 percent, and food-away-from-home prices are predicted to increase between 4.0 and 5.0 percent.
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 prices in 2020.
CPI Forecast Changes This Month
The ranges for seven food categories and one aggregate category were revised upward this month. Three food price categories were revised downward.
The increases in all-food and food-at-home prices continued to slow in October and were the smallest of 2022. However, price increases in those categories were still larger than most changes before 2022. Prices increased for 11 food categories and 3 aggregate categories in October, and prices for 3 food categories increased by at least 1.0 percent from September. Prices declined for five food categories and two aggregate categories in October. The continuing increases in the Federal funds (interest) rate by the Federal Reserve place downward pressure on prices, and prices for unprocessed agricultural commodities have decreased each month since peaking in May 2022. The effects of these conditions will be closely monitored as they unfold to assess their impacts on food prices.
Beef and veal prices declined by 0.8 percent in October 2022, were 3.6 percent lower than October 2021, and were the only food category to experience a decline year over year. However, prices remain elevated following large increases in 2020 and 2021. Prices for other meats increased by 3.0 percent in October 2022 and were 16.9 percent higher than October 2021. Beef and veal prices are now predicted to increase between 5.0 and 6.0 percent and prices for other meats are predicted to increase between 13.5 and 14.5 percent in 2022.
Retail egg prices increased 10.1 percent in October 2022 and reached 43.0 percent above October 2021 prices. The ongoing outbreak of highly pathogenic avian influenza (HPAI) reduced the U.S. egg-layer flock, as well as the poultry flock to a lesser extent. This decrease in the poultry flock and spike in HPAI prevalence are expected to increase wholesale and retail egg prices for the coming months. This outbreak has contributed to elevated egg and poultry prices as over 50 million birds, 267 commercial flocks, and 46 States have been affected. Price impacts of the outbreak will be monitored closely. Egg prices are now predicted to increase between 29.5 and 30.5 percent in 2022.
Dairy product prices increased by 0.2 percent in October 2022 and were 15.5 percent higher than October 2021. Price increases for dairy products slowed in recent months, due in part to higher-than-expected supplies of milk. Prices for dairy products are now predicted to increase between 11.5 and 12.5 percent in 2022.
Prices for fresh fruits decreased 0.9 percent in October 2022 and have fallen slightly from their peak in May 2022. Fresh vegetable prices increased by 0.5 percent in October 2022, an 8.3-percent increase from October 2021. Processed fruits and vegetables also increased by 0.6 percent in October and are 15.9 percent higher than October 2021. Fresh fruits prices are now predicted to increase by 7.5 and 8.5 percent, fresh vegetables prices are predicted to increase between 6.0 and 7.0 percent, processed fruits and vegetables prices are predicted to increase between 11.5 and 12.5 percent, and prices for the aggregate category of fruits and vegetables are predicted to increase between 8.0 and 9.0 percent in 2022.
Following large price increases in January through October 2022, forecast ranges for fats and oils, sugar and sweets, and nonalcoholic beverages have been adjusted upward. Economy-wide factors, including ongoing supply-chain issues and energy, transportation, and labor costs, have contributed to increases in prices across food categories. However, recent declines in agricultural commodity and energy prices are expected to ease price increases across these categories through the remainder of 2022. In 2022 compared with 2021, prices for fats and oils are now predicted to increase by 18.5 and 19.5 percent, sugar and sweets are predicted to increase between 10.0 and 11.0 percent, and nonalcoholic beverages prices are predicted to increase between 10.5 percent and 11.5 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
The PPI forecast ranges for farm-level eggs, farm-level fruits, and farm-level vegetables were revised upward this month. The forecast ranges for wholesale beef, wholesale poultry, and farm-level soybeans were revised downward.
Wholesale beef prices declined 5.0 percent in October 2022, following a 5.5-percent decrease in September. Prices are 15.9 percent lower than in October 2021 but remain historically elevated due to large increases in 2021. Wholesale beef prices are predicted to decrease between 6.0 and 3.0 percent in 2022.
Wholesale poultry prices fell 10.9 percent in October 2022 on strong production, increasing supplies, and changing trade patterns. Farm-level egg prices jumped 21.8 percent and are 204.2 percent higher than October 2021. Highly pathogenic avian influenza continued to affect the egg-layer flock. Wholesale poultry prices are now predicted to increase between 14.0 and 17.0 percent in 2022. Farm-level egg prices are now predicted to increase between 130.0 and 133.0 percent in 2022.
Farm-level soybeans prices decreased by 10.2 percent in October 2022 but remain 14.6 percent above October 2021 prices on strong domestic demand. Farm-level soybean prices are now predicted to increase between 8.0 and 11.0 percent in 2022.
Farm-level fruits prices rose by 11.5 percent in October 2022, an increase of 34.5 percent from October 2021. Farm-level vegetables prices jumped by 22.4 percent in October 2022, following a 15.7-percent increase in September, and were 45.8 percent higher than October 2021. Farm-level fruits prices are now predicted to increase between 15.5 and 18.5 percent, and farm-level vegetables prices are now predicted to increase between 34.0 and 37.0 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, 2020 through 2023 for data files.