If inflation has indeed peaked, as some economists think, grocery shoppers can only hope. While some prices consumers pay have leveled off recently, food prices have kept climbing.
In its monthly food price outlook for September, the U.S. Agriculture Department (USDA) reported that grocery prices have increased 13.5% in the last 12 months, the largest increase since 1979. The cost of eggs rose by 40% while margarine prices are up nearly as much – 38%. The price of flour is up 23%.
Within the egg category, the average price of a dozen grade-A large eggs has risen to $3.12, more than 80% higher than 12 months ago. USDA attributes the price surge to a severe avian flu outbreak this year that has devastated chicken flocks.
The USDA report projects this year’s food price increases to be above the increases in 2020 and 2021. In 2022, prices of food purchased at grocery stores and consumed at home are predicted to increase between 10% and 11% while food-away-from-home prices are predicted to increase between 6.5% and 7.5%, with little significant relief in sight.
“Food prices are expected to grow more slowly in 2023 than 2022, but still above historical average rates,” USDA said in its report. “In 2023, food-at-home prices are predicted to increase between 2% and 3% and food-away-from-home prices are predicted to increase between 3% and 4%.
Struggles at the supermarket
In other words, while food prices won’t go up as fast, they also won’t retreat from their current lofty levels any time soon. That’s not good news for consumers struggling to pay the grocery bill.
In interviews with middle-class shoppers in Houma, La., the Wall Street Journal found shoppers were planning meals around what happened to be on sale. Some said they drove to as many as four supermarkets to find the best prices.
Rising food prices have moved on different paths in recent years. USDA researchers say that between the 1970s and early 2000s, food-at-home prices and food-away-from-home prices increased at similar rates. But since 2009, data shows food purchased at restaurants has risen much faster.
Prices of food purchased at grocery stores actually began going down in 2016, a trend that was reversed by the COVID-19 pandemic. In 2020, food-at-home prices increased 3.5% and food-away-from-home prices rose 3.4%.
The largest price increases were for meat categories: beef and veal prices increased by 9.6%, pork prices by 6.3%, and poultry prices by 5.6%. The only category to decrease in price in 2020 was fresh fruits, by 0.8%.