USDA: Food inflation to cool in 2022

Grocery store food prices will increase between 2.5% and 3% this year but then increase just 1.5% to 2.5% in 2022, according to the December Food Price Outlook Report from the USDA.

However, restaurant prices are increasing at a faster clip than food purchased for home consumption, the USDA said. For 2021, the USDA projects away-from-home food prices will rise between 4% and 5% this year and rise between 3% and 4% in 2022.

The all-items Consumer Price Index (CPI), a measure of economywide inflation, increased by 0.5% from October 2021 to November 2021 before seasonal adjustment, and is up 6.8% from November 2020. 

The USDA said the CPI for all food increased 0.5% from October 2021 to November 2021, and food prices were 6.1% higher than in November 2020.

So far this year

From January through November, the USDA said, 2021 food-at-home prices have increased 3.1% and food-away-from-home prices have increased 4.2%.

The CPI for all food has increased an average of 3.6% in that same January through November time period.

Of all the CPI food-at-home categories tracked, the USDA said the beef and veal category has had the largest relative price increase (8.7%) and the fresh vegetables category the smallest (0.9%). No food categories have decreased in price in 2021 compared with 2020, the agency said. 

Producer Price Index forecasts for farm-level eggs, wholesale fats and oils, farm-level fruits, farm-level vegetables, and farm-level wheat were revised upward in November, the USDA said, while forecasts for farm-level soybeans were revised downward.

Farm-level soybean prices are predicted to increase between 47% and 50% in 2021, a slight downward adjustment from the 48% to 51% predicted last month.

Prices for farm-level fruits and farm-level vegetable prices increased 20.1% and 11.5%, respectively, from October to November 2021, the USDA said. The USDA said farm-level fruit prices are predicted to increase between 3% and 6% in 2021 and farm-level vegetable prices are predicted to decrease between 6% and 9%.