Food inflation slowing, USDA report says

The rate of overall food inflation has slowed but remains above historical averages, according to a new Food Price Outlook report from the USDA.

Fresh fruit and vegetable retail prices, however, are expected to increase only slightly to not at all for 2023.

In March, the USDA said overall food prices were 8.5% higher than in March 2022.

Grocery food inflation in March was measured at 8.4% above year-ago levels, while restaurant food inflation was 8.8% up from a year ago.

In its estimate of food inflation for the entire year, the USDA said food prices are expected to grow more slowly in 2023 than in 2022 but still at above historical-average rates. 

“In 2023, all food prices are predicted to increase 6.5%, with a prediction interval of 4.9% to 8.2%,” according to the report. The report said grocery food prices are predicted to increase 6.6%, with a prediction interval of 4.4% to 8.8%, while restaurant food prices are predicted to increase 8.2%, with a prediction interval of 7.3% to 9%.

The USDA said prices for fresh fruits declined 1.7% from February 2023 to March 2023, and fresh fruit prices are now predicted to decrease 0.5% in 2023, with a prediction interval of -4.3% to 3.7%.

In addition, the USDA said prices for fresh vegetables in 2023 are predicted to continue their relatively slow growth from 2022. Fresh vegetable prices decreased by 2.2% in March 2023 and 2% in February 2023. The report said fresh vegetable prices are predicted to increase by 0.4% in 2023, with a prediction interval of -4% to 4.8%.

In 2022, grocery food prices rose 11.4%, while restaurant food prices increased by 7.7%. In 2021, grocery food prices increased by 3.5% and restaurant food prices increased by 4.5%.