Food Price Outlook, 2025
This page summarizes the January 2025 Food Price Outlook forecasts, which incorporates the December 2024 Consumer Price Index and Producer Price Index numbers.
See the Overview page for Consumer Price Index and Producer Price Index datasets that include recent price changes and forecasts of price changes for all categories discussed in this summary.
Consumer Price Index for Food (not seasonally adjusted)
The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, was unchanged from November 2024 to December 2024 and was up 2.9 percent from December 2023. The CPI for all food increased 0.2 percent from November 2024 to December 2024, and food prices were 2.5 percent higher than in December 2023.
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 November 2024 to December 2024 and was 1.8 percent higher than December 2023; and
- The food-away-from-home (restaurant purchases) CPI increased 0.3 percent in December 2024 and was 3.6 percent higher than December 2023.
In 2025, overall food prices are anticipated to rise at a rate similar to that of 2024 and at a slower pace than the historical average rate of growth. In 2025, prices for all food are predicted to increase 2.2 percent, with a prediction interval of -0.4 to 4.9 percent. Food-at-home prices are predicted to increase 1.3 percent, with a prediction interval of -2.7 to 5.5 percent. Food-away-from-home prices are predicted to increase 3.6 percent, with a prediction interval of 2.0 to 5.1 percent.
The Food Price Outlook tracks and forecasts the annual percentage change in food prices by averaging observed and forecast prices for all months in the current year, compared to all months in the previous year. The 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 Food Price Outlook data files) 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). For a summary of forecasting methods used in the Food Price Outlook, see the article ERS Refines Forecasting Methods in the Food Price Outlook.
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 and 2019, 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 explain this divergence.
In 2020, food-at-home prices increased 3.5 percent and food-away-from-home prices increased 3.4 percent. This convergence was largely driven by a rapid increase in food-at-home prices following the onset of the Coronavirus (COVID-19) pandemic, particularly for meats and poultry, while food-away-from-home price inflation remained similar to its 2019 rate. In 2021, all-food prices increased 3.9 percent as prices began accelerating in the second half of the year.
In 2022, food prices increased by 9.9 percent, faster than in any year since 1979. Food-at-home prices increased by 11.4 percent, while food-away-from-home prices increased by 7.7 percent. Food prices rose partly due to a highly pathogenic avian influenza (HPAI) outbreak that affected egg and poultry prices. Other factors included the war in Ukraine, which compounded other economy-wide inflationary pressures such as high energy costs.
In 2023, food prices increased by 5.8 percent as economy-wide inflationary factors, supply chain issues, and wholesale food prices eased from 2022. Food price growth continued to slow in 2024, rising by 2.3 percent, as those factors combined with cooling labor pressures, lower energy prices, and changes in consumer demand. Food-at-home prices increased by 1.2 percent in 2024, lower than their historical average pace of growth, and food-away-from-home prices rose by 4.1 percent, slightly outpacing their historical average.
CPI Forecast Changes This Month
Overall, prices for food-at-home rose by 0.1 percent in December 2024 compared with November 2024. From November to December 2024, prices increased for 10 food-at-home categories and declined for 5 categories. Year-over-year, prices were lower in December 2024 than December 2023 for four food-at-home categories: fish and seafood, fresh fruits, processed fruits and vegetables, and the “other meats” category.
In 2025, prices for most food categories are predicted to change at a rate below their 20-year historical average. Prices are predicted to increase for 10 food-at-home categories and decrease for 5 food-at-home categories. Prices for some inputs have fallen over the year, including energy, although prices for unprocessed agricultural commodities have increased. The effects of these conditions will be monitored to assess their impacts on food prices.
Beef and veal prices decreased by 0.2 percent in December 2024 after increasing by 1.7 percent in November, and prices for beef and veal were 4.9 percent higher than in December 2023. Beef and veal price increases are expected to moderate compared to 2024, but prices are predicted to continue to increase in 2025 due to higher input costs and tight supplies. Beef and veal prices are predicted to increase 1.5 percent in 2025, with a prediction interval of -6.8 to 11.1 percent.
Pork prices decreased 1.3 percent in December 2024, driven by seasonal trends, but were 1.8 percent higher than December 2023. Pork prices are predicted to decrease 0.8 percent in 2025, with a prediction interval of -8.5 to 7.5 percent.
Retail egg prices increased by 8.4 percent in December 2024 and continue to experience volatile month-to-month changes. An outbreak of HPAI that began in 2022, with recent detections in January 2025, contributed to elevated egg prices by reducing the U.S. egg-layer flock. HPAI continued to drive egg price increases in 2024. Egg prices in December 2024 were 36.8 percent higher than in December 2023 but still below peak prices in January 2023. Egg prices are predicted to increase 20.3 percent in 2025, with a prediction interval of 0.1 to 45.3 percent.
Prices for dairy products increased by 0.2 percent in December 2024 and were 1.3 percent higher than December 2023. Dairy product prices rose in the latter half of 2024, driven by higher farm and wholesale prices, due in part to lower milk production. Dairy product prices are predicted to increase in 2025 after declining by -0.2 percent in 2024. Dairy product prices are predicted to increase 1.3 percent in 2025, with a prediction interval of -3.4 to 6.2 percent.
Fresh fruit prices fell 2.1 percent in December 2024, partially due to typical seasonal trends. Fresh fruit prices were 0.2 percent below December 2023, driven by lower prices for bananas and citrus fruits, and are expected to grow more slowly than their historical average in 2025. Prices for fresh fruits are predicted to increase by 0.7 percent in 2025, with a prediction interval of -4.4 to 6.3 percent.
Prices also decreased in December 2024 for fats and oils (by 0.7 percent) and nonalcoholic beverages (by 0.4 percent). Prices for fats and oils are predicted to decline in 2025, while nonalcoholic beverage prices are forecast to grow more slowly than their historical average. Prices for fats and oils are predicted to decrease by 1.6 percent in 2025, with a prediction interval of -7.7 to 5.0 percent. Prices for nonalcoholic beverages are predicted to increase by 1.5 percent in 2025, with a prediction interval of -2.3 to 5.5 percent.
Producer Price Index for Food (not seasonally adjusted)
A Producer Price Index (PPI) resembles a CPI in that a PPI 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: (1) unprocessed foodstuffs and feedstuffs, (2) processed foods and feeds, and (3) finished consumer foods. The farm-level and wholesale-level prices of commodities in these groups 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 CPIs, which are further down the supply chain. 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
In 2025, prices are predicted to increase for eight PPI categories, decrease for four categories, and remain unchanged for one category. Greater volatility in farm-level and wholesale-level prices leads to wider prediction intervals for these products compared with retail-level products.
Wholesale poultry prices decreased by 4.0 percent in December 2024, reversing a 4.3-percent increase in November. Prices were 4.4 percent higher in December 2024 than December 2023. Wholesale poultry prices are predicted to decrease 1.4 percent in 2025, with a prediction interval of -14.1 to 13.8 percent.
Prices for farm-level eggs rose by 3.4 percent in December 2024 after spiking by 54.3 percent in November. Farm-level egg prices continued to experience large monthly changes as the ongoing HPAI outbreak continued to affect egg-layer flocks, with volatile effects on prices. In December 2024, prices for farm-level eggs were 134.5 percent higher than December 2023, when prices were lower following a lull in the outbreak through much of 2023. Farm-level egg prices are predicted to increase 45.2 percent in 2025, with a prediction interval of -30.9 to 228.8 percent. Egg prices are the most volatile category tracked by USDA, ERS, leading to a wide prediction interval.
Prices for farm-level milk fell by 4.9 percent in December 2024, although farm-level milk prices rose throughout most months in 2024, and prices were 11.7 percent higher than December 2023, partially due to reduced dairy cattle herds. Prices for farm-level milk are predicted to increase by 1.3 percent in 2025, with a prediction interval of -22.1 to 32.4 percent.
Farm-level fruit prices rose by 5.0 percent in December and were 17.3 percent higher than December 2023. Despite decreasing by 14.7 percent in December 2024, prices for farm-level vegetables were 21.3 percent higher than December 2023. Prices for these categories declined slightly in 2024 on lower input costs and higher production for some products but are expected to increase in 2025 as some growing areas were affected by extreme weather in the second half of 2024. Prices for farm-level fruits are predicted to increase by 8.6 percent in 2025, with a prediction interval of -4.3 to 23.8 percent. Prices for farm-level vegetables are predicted to increase by 1.4 percent in 2025, with a prediction interval of -20.8 to 31.8 percent.
For official USDA farm-level price forecasts, see the World Agricultural Supply and Demand Estimates at a Glance report. For additional information, detailed explanations, and analyses of farm-level prices, see USDA Economic Research Service Outlook publications including the Livestock, Dairy, and Poultry, Oil Crops, Wheat, Fruit and Tree Nuts, and Vegetables and Pulses reports.
See the Overview page for Consumer Price Index and Producer Price Index datasets that include recent price changes and forecasts of price changes for all categories discussed in this summary.