Last year, COVID-19 related disruptions drove prices for food purchased at grocery stores to an unusually high 3.5% increase. For 2021, the increases on many of those same food items will be between 2-3% overall, but USDA economist Carolyn Chelius recently bumped up the projected price forecasts for meats by 1% in the department’s latest Food Price Outlook.
The outlook predicts beef and veal prices will increase 3-4% and pork prices will go up 4-5%. Poultry prices are expected to increase 2.5-3.5%. Fish and seafood prices are now predicted to increase between 2-3%. Chelius says fresh fruits are leading the list of this year's retail price hikes and are now predicted to increase between 5-6% in 2021.
The level of food price inflation varies depending on whether the food was purchased for consumption away from home or at home. In 2021, food-at-home prices are expected to increase between 2-3%, and food-away-from-home prices are expected to increase between 3-4%. In 2022, food-at-home prices are expected to increase between 1.5-2.5% and food-away-from-home prices are expected to increase between 3-4%.
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USDA says prices have been driven up by strong domestic and international demand, high feed costs, and supply chain disruptions. Winter storms and drought impacted meat prices this spring, and processing facility closures due to cybersecurity attacks impacted beef and other meat production in later months. In addition, Chelius noted that economy-wide inflation is also high and is contributing to overall price increases.
The Consumer Price Index for “all items,” which encompasses food, housing, transportation, and other categories, has increased 2.9% so far in 2021 compared to 2020. “For context, annual all-items inflation has averaged 2% over the past 20 years. Inflation in 2021 is already nearly 50% higher than average annual inflation only halfway through the year. Above-average inflation is expected to continue through 2022,” the agency noted.
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