By: Clay Steward
In 2023, all food prices are predicted to increase between three point five percent and four point five percent, food-at-home prices are predicted to increase between three percent and four percent, and food-away-from-home prices are predicted to increase between four and five percent.
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 divided; while food-at-home prices deflated in 2016 and 2017, monthly food-away-from-home prices must have been rising consistently since then. The separation is partly due to differences between the costs of serving prepared food at restaurants and retailing food in supermarkets and grocery stores.
According to USDA.gov, the increases in all-food and food-at-home prices continued to slow in November and were the smallest of 2022. Prices increased for eight food categories, three aggregate categories and egg prices increased by two point three percent from October. In turn, prices declined for eight food categories and one aggregate category in November. 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.
Poultry prices decreased point eight percent in November 2022, following a one point one percent decrease in October, yet remain 13.1 percent higher than in November 2021. Before October, Poultry prices had increased for 12 consecutive months partially due to high costs of wholesale poultry meat. It is predicted that poultry prices will increase between 14 and 15 percent.
Retail egg prices increased two point three percent in November 2022 and reached 49.1 percent above November 2021 prices. The ongoing outbreak of highly pathogenic avian influenza (HPAI) continues to reduce the U.S. egg-layer flock, as well as the poultry flock to a lesser extent. This decrease in the egg-layer flock is expected to increase wholesale and retail egg prices for the coming months. This outbreak has contributed to elevated egg and poultry prices as over 57 million birds, 300 million flocks, and 47 states have been affected. Egg prices are now predicted to increase between 30.5 percent and 31.5 percent.
Retail prices for fresh vegetables increased by point eight percent in November 2022, while upstream, wholesale prices for fresh vegetables increased by 38.1 percent. Elevated prices for wholesale fresh vegetables are expected to place upward pressure on retail prices in the coming months. Fresh vegetable prices are now predicted to increase by six point five percent and seven point five percent and fresh fruits and vegetables prices are predicted to increase seven percent and eight percent.
Following large price increases in January through October 2022, the prices for fats and oils, cereals and bakery products and other foods either fell or slowed in November 2022. Recent declines in agricultural commodity and energy prices are expected to continue 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 percent and 19 percent, cereals and bakery products prices are predicted to increase between 12.5 percent and 13.5 percent and other food prices are predicted to increase between 12 percent and 13 percent.
Food prices are affected by a number of factors, including extreme weather, diseases impacting crops and livestock, supply chain complications and geopolitical unrest including the war in Ukraine. That makes it more difficult for the US government to use tactics like raising interest rates to moderate food prices.