Retail Food Price Forecasting at ERS

by Frederick L. Joutz, Robert P. Trost, Charlie Hallahan, Annette Clauson, and Mark Denbaly

Forecasting retail food prices has become increasingly important to the U.S. Department of Agriculture (USDA). This is due to the changing structure of food and agricultural economies and the important signals the forecasts provide to farmers, processors, wholesalers, consumers, and policymakers. The American food system is going through fundamental structural changes. It is unclear how these changes will affect the cyclical variation of food price markups and translate into changes in retail food prices. The only government entity that systematically examines food prices and provides food price forecasts (on an annual basis) is the Economic Research Service, an agency of USDA. This report explains the ERS procedures in forecasting food prices and assesses how changes in the current procedures would improve the quality of the forecasts.

Keywords: cyclical variation, forecasting, retail food prices

In this publication...

• Entire Report
• Frontmatter (Title page, Contents, Summary)
• Introduction
• Baseline Projections and Retail Food Price Forecasts
• The Forecasting Process
• Historical Food Price CPI Data
• Initial Assessment of ERS Forecasts
• Comparison with Alternative Models
• Limitations of the Alternative Time Series Model Forecasts
• Conclusions
• Bibliography
• Tables
• Figures