The USDA released a recent report with 2019 food price data, along with food price predictions for 2020.
From October 2018 to October 2019 overall food prices increased 2.1%. The Consumer Price Index (CPI) for retail food purchases (food-at-home) was up 1.0%. The CPI for restaurant purchases (food-away-from-home) was up 3.3%.
For all of 2019, the USDA expects the price increase for food-at-home to be 0.5% to 1.5%, while food-away-from-home prices will grow 2.0% to 3.0%. Predicted 2019 price changes vary by category:
- Overall meat prices have an expected growth of 0.5% to 1.5%. Projected price increases for pork are 1.0% to 2.0%. Anticipated price increases for other meats (frankfurters, lunch meats, mutton, lamb, and organ meats) are 0.0 to 1.0%.
- Prices for processed fruits and vegetables are expected to increase 0.5% to 1.5%.
- Fresh fruit prices are expected to decrease 0.5% to 1.5%.
- Egg prices are expected to decrease 10.0% to 11.0%.
For 2020, the USDA makes the same predictions: prices for food-at-home will increase 0.5% to 1.5%, while prices for food-away-from-home will increase 2.0% to 3.0%.
Next year will potentially mark the fifth consecutive year when retail food prices either decrease or increase at rates lower than average. In 2016 and 2017, food-at-home prices went down, and they increased only 0.4% in 2018. The 20-year historical annual average rate of increase in retail food prices is 2.0%
Foods that could see lower prices in 2020 are processed fruits and vegetables, fats, and oils. Products expected to increase in price in 2020 at rates lower than the 20-year historical average include most meats and seafood, sugars and sweets, fresh vegetables, and nonalcoholic beverages. Pork, cereal and bakery products, fresh fruits, and dairy products are also expected to increase in price, at rates near the 20-year historical average.
Unlike retail food prices over the past few years, food-away-from-home prices continued to rise, and the USDA expects the trend to continue in 2020 with a price increase of 2.0% to 3.0%. The disparities in at-home and away-from-home food prices are partly due to the differences in the cost structures of restaurants and retail food stores.
The USDA also noted that changes in the Producer Price Index (PPI), which measures the average change in prices paid to domestic producers, are useful in understanding what may happen to the CPI in the near future. August to September 2019 saw decreases in prices in the PPI:
- Unprocessed food and feed prices went down 4.3%.
- Processed food and feed prices decreased 0.1%.
- Finished consumer food prices were down 0.1%.
It remains to be seen if these decreases indicate future retail price trends.