USDA releases food inflation forecast

The U.S. Department of Agriculture recently released its Food Price Outlook for 2020, indicating a rise in its food inflation forecast.

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

• The food-away-from-home (restaurant purchases) Consumer Price Index increased 0.3% in October and was 3.9% higher than October 2019.
• The food-at-home (grocery store or supermarket food items) CPI increased 0.2% from September to October 2020 and was 4.0% higher than October 2019.

In 2020 thus far, compared to 2019, food-at-home prices have increased 3.4% and food-away-from-home prices have increased 3.0%. The CPI for all food increased an average of 3.3% over this same period. Of all the CPI food categories the USDA’s Economic Research Service tracks, the category of beef and veal has had the greatest relative price increase (10.0%); fresh fruits have had the largest relative price decrease (1.0%).

Many prices have been relatively slow to retreat from the highs reached due to the pandemic, so some forecasts have been revised upward this month. In 2020, food-at-home prices are expected to increase between 3.0% and 4.0%, and food-away-from-home prices are expected to increase between 2.5% and 3.5%. In 2021, food-at-home prices are expected to increase between 1.0% and 2.0%, and food-away-from-home prices are expected to increase between 2.0% and 3.0%.