Food inflation will slow to about 3% in 2024, about half the pace of 2023, according to a new forecast.
The USDA now projects all food prices for 2023 will increase by 5.8%, with a prediction interval of 5.7% to 6%.
The agency says that grocery (food-at-home) prices are predicted to increase by 5.2% in 2023, with a prediction interval of 4.9% to 5.4%. Restaurant (food-away-from-home) prices are predicted to increase by 7.1%, with a prediction interval of 7% to 7.2%, the USDA’s Food Price Outlook report said.
2024 outlook
USDA economists said in the forecast that food prices are expected to continue to decelerate but not decline in 2024. In 2024, all food prices are predicted to increase 2.9% in 2024, with a prediction interval of -0.9% to 6.8%.
Grocery food prices are predicted to increase by 1.6%, with a prediction interval of -4% to 7.8%. Restaurant food prices are predicted to increase by 4.3%, with a prediction interval of 2.3% to 6.3%, the report said.
All food prices in October were 3.3% higher than year-ago levels, with restaurant food prices up 5.4% and grocery food prices up 2.1%.
Taking stock
The USDA said prices are expected to increase for 12 grocery categories in 2023: beef and veal (4%), other meats (4.6%), poultry (3.4%), fish and seafood (0.4%), dairy products (4%), fats and oils (9.3%), fresh vegetables (0.9%), processed fruits and vegetables (8.5%), sugar and sweets (8.9%), cereals and bakery products (8.5%), nonalcoholic beverages (7.2%) and other foods (6.8%).
Retail prices for fresh fruits are predicted to increase by 0.5% in 2023, with a prediction interval of -0.1% to 1.2%.
The USDA said fresh vegetable prices are predicted to increase 0.9% in 2023, with a prediction interval of 0.3% to 1.6%.
Fresh produce deflation
Both fruits and vegetables will see deflation for farm-level prices this year, the USDA said.
The USDA said prices for farm-level fruits declined 6.2% in October 2023 and were 18.1% lower than in October 2022.
Prices for farm-level vegetables decreased 1.7% in October 2023 and fell 41.8% below prices in October 2022, the USDA said.
Prices for farm-level fruits are predicted to decrease 2.7% in 2023, the USDA said, with a prediction interval of -4.5% to -0.6%.
Farm-level vegetable prices are predicted to decrease 11.2% in 2023, with a prediction interval of -14.6% to -6.9%, the USDA said.
