Food Price Outlook, 2022
This page summarizes the April 2022 forecasts, which incorporate the March 2022 Consumer Price Index and Producer Price Index numbers.
See Changes in Food Price Indexes, 2019 through 2022 for data files.
The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased by 1.3 percent from February 2022 to March 2022 before seasonal adjustment, up 8.5 percent from March 2021. The CPI for all food increased 1.0 percent from February 2022 to March 2022, and food prices were 8.8 percent higher than in March 2021.
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 0.3 percent in March 2022 and was 6.9 percent higher than March 2021; and
- The food-at-home (grocery store or supermarket food purchases) CPI increased 1.5 percent from February 2022 to March 2022 and was 10.0 percent higher than March 2021.
Food price increases are expected to be above the increases observed in 2020 and 2021. In 2022, food-at-home prices are predicted to increase between 5.0 and 6.0 percent, and food-away-from-home prices are predicted to increase between 5.5 and 6.5 percent. Price increases for food away from home are expected to exceed historical averages and the inflation rate in 2021.
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 2020.
CPI Forecast Changes This Month
The ranges for all food categories except food away from home were revised upward this month. No food price categories were revised downward.
The large increases in all-food and food-at-home prices in March followed similarly large changes in January and February. These price increases were driven by increases for many products. While prices did not decrease for any reported food-price category, prices for 14 disaggregate food categories increased by more than a percent in March. The impacts of the conflict in Ukraine and the recent increases in interest rates by the Federal Reserve are expected to put upward and downward pressures on food prices, respectively. The situations will be closely monitored to assess the net impacts of the concurrent events on food prices as they unfold. All food prices are now predicted to increase between 5.0 and 6.0 percent, and food-at-home prices are predicted to increase between 5.0 and 6.0 percent in 2022.
Prices for all meat categories increased by a percent or more between February 2022 and March 2022. While wholesale beef prices decreased by 3.6 percent in March 2022, retail beef prices increased by 1.0 percent. Wholesale pork prices, along with port congestion, contributed to a 1.4-percent increase in retail pork prices in March 2022. In 2022, beef and veal prices are now predicted to increase between 6.0 and 7.0 percent; pork prices are predicted to increase between 4.0 and 5.0 percent; and other meat prices are predicted to increase between 3.5 and 4.5 percent. The aggregate categories of meats, poultry, and fish are predicted to increase between 5.5 and 6.5 percent, and meats are predicted to increase between 4.5 and 6.5 percent in 2022.
Retail poultry prices have been high, with historically low stocks of frozen chicken (also called “cold storage”). Egg prices increased by 1.9 percent in March 2022, following a 2.2-percent increase in February. An ongoing outbreak of highly pathogenic avian influenza could contribute to poultry and egg price increases through decreased supply or prices could be reduced by a drop in international demand for U.S. poultry. Any price impacts of the outbreak will be monitored closely. Poultry prices are now predicted to increase between 7.5 and 8.5 percent, and egg prices are predicted to increase between 6.0 and 7.0 percent.
A 1.5-percent increase in the price of fresh fish and seafood drove a 0.8-percent price increase in fish and seafood between February and March 2022. Fish and seafood prices are now predicted to increase between 5.0 and 6.0 percent.
Rapid increases in the consumption of dairy products have driven increases in retail prices in recent months. This trend continued in March 2022 with a 1.2-percent increase in the prices for dairy products. Dairy product prices are predicted to increase between 6.0 and 7.0 percent in 2022.
Following large price increases in January–March 2022, forecast ranges for fats and oils, fresh fruits, fresh vegetables, processed fruits and vegetables, sugar and sweets, cereal and bakery products, nonalcoholic beverages, and other foods have been adjusted upward. In 2022 compared with 2021, fats and oils prices are predicted to increase between 8.0 and 9.0 percent in 2022; fresh fruit prices between 6.0 and 7.0 percent; fresh vegetable prices between 4.0 and 5.0 percent; processed fruit and vegetable prices between 5.5 and 6.5 percent; sugar and sweets between 5.5 and 6.5 percent; cereal and bakery product prices between 6.0 and 7.0 percent; nonalcoholic beverages between 4.5 and 5.5 percent; and other food prices between 5.5 and 6.5 percent. The aggregate categories of fruits and vegetables are predicted to increase between 4.5 and 5.5 percent, and fresh fruits and vegetables are predicted to increase between 4.5 and 5.5 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
PPI forecast ranges for wholesale poultry, farm-level milk, wholesale dairy, farm-level soybeans, wholesale fats and oils, farm-level vegetables, farm-level wheat, and wholesale wheat flour were revised upward this month. Forecast ranges for wholesale beef were revised downward.
Due to increased drought, beef prices decreased by 3.6 percent in March, following a 2.9 percent decrease in February 2022. Wholesale beef prices are predicted to increase between 2.0 and 5.0 percent.
Wholesale poultry prices increased by 4.1 percent in both February and March 2022, climbing to 27.9 percent above March 2021 prices. Highly pathogenic avian influenza could either place upward pressure on poultry prices through decreased production or downward pressure through decreased access to international markets. Wholesale poultry prices are now predicted to increase between 12.0 and 15.0 percent in 2022.
Farm-level milk prices fell by 7.7 percent but remain 31.1 percent above March 2021 prices. Wholesale dairy prices increased by 2.5 percent in March 2022 on strong domestic and international demand. Farm-level milk prices are now predicted to increase between 2.0 and 5.0 percent in 2022, and wholesale dairy prices are predicted to increase between 10.0 and 13.0 percent.
Farm-level soybean and wholesale fats and oils prices increased by 6.9 and 7.5 percent, respectively, in March 2022, following large price increases in February. Low international production and inventories of oils have driven price increases. Farm-level soybean prices are predicted to increase between 12.0 and 15.0 percent in 2022. Wholesale fats and oils prices are predicted to increase between 40.0 and 43.0 percent.
Farm-level vegetable prices increased by 42.4 percent in March 2022 and reached 81.5 percent above the prices observed in March 2021. Farm-level vegetable prices are predicted to increase between 8.0 and 11.0 percent in 2022.
Farm-level wheat and wholesale wheat flour prices increased by 24.3 percent and 8.3 percent in March 2022. The conflict in Ukraine has placed upward pressure on international wheat markets. Farm-level wheat prices are now predicted to increase between 40.0 and 43.0 percent, and wholesale wheat flour prices are predicted to increase between 21.0 and 24.0 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, 2019 through 2022 for data files.