Food Price Outlook

The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, decreased by 0.3 percent from November 2022 to December 2022 and was up 6.5 percent from December 2021.

Photo:  Pennsylvania Beef Council

Food Price Outlook

The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, decreased by 0.3 percent from November 2022 to December 2022 and was up 6.5 percent from December 2021. The CPI for all food increased 0.3 percent from November 2022 to December 2022, and food prices were 10.4 percent higher than in December 2021.

The level of food price inflation varies depending on whether the food was purchased for consumption at home or away from home:


--The food-at-home (grocery store or supermarket food purchases) CPI increased 0.3 percent from November 2022 to December 2022 and was 11.8 percent higher than December 2021; and

--The food-away-from-home (restaurant purchases) CPI increased 0.4 percent in December 2022 and was 8.3 percent higher than December 2021.

In 2022, food prices increased by 9.9 percent. Food-at-home prices increased by 11.4 percent, while food-away-from-home prices increased by 7.7 percent. All food price categories tracked by the U.S. Department of Agriculture (USDA), Economic Research Service (ERS) increased by more than 5 percent. Following an outbreak of Highly Pathogenic Avian Influenza (HPAI), egg prices had the largest price increase (32.2 percent) of any category tracked by ERS between 2021 and 2022. Beef and veal prices increased the least (5.3 percent) between 2021 and 2022 and generally declined from peak prices in November 2021. Eleven food-price categories increased by more than 10 percent, including fats and oils (18.5 percent), poultry (14.6 percent), other meats (14.2 percent), cereals and bakery products (13.0 percent), other foods (12.7 percent), dairy products (12.0 percent), processed fruits and vegetables (12.0 percent), nonalcoholic beverages (11.0 percent), and sugar and sweets (10.4 percent). All food categories grew faster than their historical average rate, and the 20-year average inflation rate increased for all food categories.

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 7.1 percent, with a prediction interval of 4.2 to 10.1 percent. Food-at-home prices are predicted to increase 8.0 percent, with a prediction interval of 4.5 to 11.7 percent. Food-away-from-home prices are predicted to increase 8.2 percent, with a prediction interval of 6.7 to 9.7 percent.

Recent Historical Overview


Between the 1970s and early 2000s, food-at-home prices and food-away-from-home prices increased at similar rates. Since 2009, however, their rates of growth have mostly diverged; while food-at-home prices deflated in 2016 and 2017, monthly food-away-from-home prices have been rising consistently since then. The divergence is partly due to differences between the costs of serving prepared food at restaurants and retailing food in supermarkets and grocery stores.

In 2020, food-at-home prices increased 3.5 percent and food-away-from-home prices 3.4 percent. This convergence was largely driven by a rapid increase in food-at-home prices, while food-away-from-home price inflation remained within 0.3 percentage points of the 2019 inflation rate. The largest price increases were for meat categories: beef and veal prices increased by 9.6 percent, pork prices by 6.3 percent, and poultry prices by 5.6 percent. The only category to decrease in price in 2020 was fresh fruits, by 0.8 percent.

In 2021, food-at-home prices increased 3.5 percent and food-away-from-home prices increased 4.5 percent. The CPI for all food increased an average of 3.9 percent in 2021. Of all the CPI food-at-home categories tracked by the U.S. Department of Agriculture (USDA), Economic Research Service (ERS), the beef and veal category had the largest relative price increase (9.3 percent) and the fresh vegetables category the smallest (1.1 percent). No food categories decreased in price in 2021 compared with prices in 2020.