Food inflation spiking well above historical averages

Grocery food inflation for all of 2022 is expected to average between 5% and 6%, the latest USDA Food Price report said.

In March, retail grocery prices were a stunning 10% higher compared with a year ago, the USDA reported.

The report said food-away-from-home prices are predicted to increase between 5.5% and 6.5% in 2022. Restaurant food prices were running 6.9% above year-ago levels in March, according to the report.

Those price hikes for retail and restaurant food are above the increases recorded for both 2020 and 2021, the USDA said.

The report said the inflation rate for all food increased 1% from February 2022 to March 2022, and food prices were 8.8% higher than in March 2021. For 2022, the inflation rate for all food is forecast at 5% to 6%, compared with 3.9% for last year and 2.4% for the 20-year average.

Closer look

The report said the overall retail inflation rate for fruits and vegetables is predicted to range between 4.5% to 5.5% in 2022, up from 3.3% inflation in 2021 and the 20-year average of 2%.

At the grower level, the USDA said farm-level inflation was running even higher than at retail.

Farm-level vegetable prices increased by 42.4% in March 2022 and reached 81.5% above the prices observed in March 2021, according to the report. For the entire year, farm-level vegetable prices are predicted to increase between 8% and 11% in 2022, the USDA said.

Farm-level fruit prices in March were 8% lower than in February but still 18.5% higher than in March 2021. Farm-level fruit inflation for 2022 is expected to range from 12.5% to 15.5%, compared with an inflation rate of 5.3% in 2021 and the 20-year historical average of 2.4%.