Summary Findings

Food Price Outlook, 2021

This page summarizes the November 2021 forecasts, which incorporate the October 2021 Consumer Price Index and Producer Price Index numbers.

See Changes in Food Price Indexes, 2019 through 2022 for data files.

Consumer Price Index for Food (not seasonally adjusted)

The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased by 0.8 percent from September 2021 to October 2021 before seasonal adjustment, up 6.2 percent from October 2020. The CPI for all food increased 1.0 percent from September 2021 to October 2021, and food prices were 5.3 percent higher than in October 2020.

The level of food price inflation varies depending on whether the food was purchased for consumption away from home or at home:

  • The food-away-from-home (restaurant purchases) CPI increased 0.8 percent in October 2021 and was 5.3 percent higher than October 2020; and
  • The food-at-home (grocery store or supermarket food purchases) CPI increased 1.1 percent from September 2021 to October 2021 and was 5.4 percent higher than October 2020.

In 2021 thus far compared with 2020 (reported as "Year-to-date avg. 2020 to avg. 2021"), food-at-home prices have increased 2.8 percent and food-away-from-home prices have increased 3.9 percent. The CPI for all food has increased an average of 3.3 percent. 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 has had the largest relative price increase (7.6 percent) and the fresh vegetables category the smallest (0.8 percent). No food categories have decreased in price in 2021 compared with 2020.

In 2021, food-at-home prices are expected to increase between 2.5 and 3.5 percent, and food-away-from-home prices are expected to increase between 4.0 and 5.0 percent. In 2022, food-at-home prices are expected to increase between 1.5 and 2.5 percent, and food-away-from-home prices are expected to increase between 3.0 and 4.0 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 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 2019, retail food-at-home prices rose 0.9 percent. This increase was the second in 4 years, but the rate was still below the 20-year annual average of 2.0 percent. While prices for poultry, eggs, fats and oils, and fresh fruits declined in 2019, prices for all other food categories increased. Fresh vegetables had the largest annual average increase of 3.8 percent in 2019 and eggs the largest annual average decrease of 10.0 percent.

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 0.2 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.

CPI Forecast Changes This Month

Forecast ranges for over half the food categories tracked by ERS were revised upward this month. Forecast ranges for food away from home, beef and veal, pork, other meats, poultry, eggs, fats and oils, fresh vegetables, and cereals and bakery products were all revised upward this month. Forecast ranges for the aggregate categories of meats; meats, poultry, and fish; and fruits and vegetables were revised upward as well.

All food categories tracked by ERS increased in price from September to October 2021. Meat categories posted the largest increases: pork prices increased 2.2 percent from September to October 2021, beef and veal prices increased 1.9 percent, other meat prices increased 1.7 percent, and poultry prices increased 0.8 percent. Prices have been driven up by strong domestic and international demand, labor shortages, supply chain disruptions, and high feed and other input costs. Concentration and capacity constraints within the meat industry could also affect prices. Pork prices are predicted to increase between 7.0 and 8.0 percent in 2021, beef and veal prices are predicted to increase between 7.5 and 8.5 percent, other meat prices are predicted to increase between 2.0 and 3.0 percent, and poultry prices are predicted to increase between 4.0 and 5.0 percent. Prices for the aggregate category of “meats” are predicted to increase between 6.0 and 7.0 percent. Prices for the aggregate category of “meats, poultry, and fish” are predicted to increase between 5.0 and 6.0 percent.

Egg prices increased 0.4 percent from September to October 2021, following an increase of 3.3 percent from August to September. Egg prices are high partly due to robust foreign demand, especially from South Korea and neighboring countries, which were impacted by avian influenza earlier this year. U.S. egg prices are predicted to increase 3.5 to 4.5 percent in 2021.

Fats and oils prices increased 0.2 percent from September to October 2021, and prices are 4.0 percent higher, on average, in 2021 compared to 2020. Prices for fats and oils are predicted to increase 4.0 to 5.0 percent in 2021.

Fresh vegetable prices increased 1.3 percent from September to October 2021. The highest monthly price increases within this aggregate category were for lettuce, for which prices increased 1.5 percent from September to October 2021, and “other fresh vegetables” (fresh vegetables excluding lettuce, potatoes, and tomatoes), for which prices increased 1.0 percent. Lettuce prices are 2.6 percent higher, on average, in 2021 than in 2020, and other fresh vegetable prices are 2.0 percent higher. Fresh vegetable prices are predicted to increase 0.5 to 1.5 percent in 2021. Prices for the aggregate category of fruits and vegetables are predicted to increase between 2.5 to 3.5 percent.

Prices for cereals and bakery products increased 0.9 percent from September to October 2021. The highest monthly price increase within this aggregate category was for breakfast cereal, for which prices increased 3.3 percent from September to October 2021. Prices for cereals and bakery products are now predicted to increase 1.5 to 2.5 percent in 2021.

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

PPI forecasts for wholesale beef, farm-level milk, farm-level vegetables, farm-level wheat, and wholesale wheat flour were revised upward this month. Forecasts for wholesale pork and farm-level soybeans were revised downward.

Wholesale beef prices decreased 11.2 percent from September to October 2021, but are still 23.7 percent higher, on average, in 2021 compared to 2020. Despite the month-over-month price decrease for wholesale beef, prices were 41.5 percent higher in October 2021 than in October 2020. High feed costs, increased demand, and changes in the supply chain have increased prices for wholesale beef. Concentration and capacity constraints within the meat industry could also affect meat prices and spreads between different points along the supply chain. Wholesale beef prices are predicted to increase between 23.0 and 26.0 percent in 2021. As with beef, wholesale pork prices also decreased slightly from September to October—by 1.6 percent—following another slight price decrease from August to September. Given this decreasing trend, forecasts have been adjusted downward: wholesale pork prices are predicted to increase between 16.0 and 19.0 percent in 2021—an adjustment downward from the 17.0 to 20.0 percent predicted last month.

Farm-level milk prices increased 2.9 percent from September to October 2021. While annual prices are still predicted to decrease, forecasts have been adjusted upward: farm-level milk prices are predicted to decrease between 1.5 and 4.5 percent in 2021—an adjustment upward from the -6.0 to -3.0 percent predicted last month.

Higher-than-expected soybean stocks led to a 6.7-percent price decrease from September to October 2021, which followed an 8.0-percent price decrease from August to September. Farm-level soybean prices are predicted to increase between 48.0 and 51.0 percent in 2021—an adjustment downward from the 51.0 to 54.0 percent predicted last month.

Farm-level wheat prices and wholesale wheat flour prices increased from September to October 2021, by 2.9 and 4.5 percent, respectively. As a result, forecasts have been adjusted upward: farm-level wheat prices are predicted to increase between 38.0 and 41.0 percent in 2021; wholesale wheat flour prices are predicted to increase between 17.0 and 20.0 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 Changes in Food Price Indexes, 2019 through 2022 for data files.