Food Price Outlook, 2023
This page summarizes the May 2023 forecasts, which incorporate the April 2023 Consumer Price Index and Producer Price Index numbers.
See the Overview page for Consumer Price Index and Producer Price Index datasets.
Note: The Food Price Outlook data series and forecasting methodology were revised in January 2023 based on the approach documented in the following report. As of January 2023, the Food Price Outlook Summary Findings are based on the revised data series. Forecasts using the prior forecasting methodology remain available as data files (“Legacy Data”). The U.S. Department of Agriculture, Economic Research Service (USDA, ERS) will continue to produce new monthly forecasts using both the updated methods and the legacy methods through June 2023.
Time-Series Methods for Forecasting and Modeling Uncertainty in the Food Price Outlook
Consumer Price Index for Food (not seasonally adjusted)
The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, rose by 0.5 percent from March 2023 to April 2023 and was up 4.9 percent from April 2022. The CPI for all food increased 0.2 percent from March 2023 to April 2023, and food prices were 7.7 percent higher than in April 2022.
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 0.1 percent from March 2023 to April 2023 and was 7.1 percent higher than April 2022; and
- The food-away-from-home (restaurant purchases) CPI increased 0.4 percent in April 2023 and was 8.6 percent higher than April 2022.
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 6.2 percent, with a prediction interval of 4.9 to 7.5 percent. Food-at-home prices are predicted to increase 6.3 percent, with a prediction interval of 4.5 to 8.1 percent. Food-away-from-home prices are predicted to increase 7.7 percent, with a prediction interval of 7.0 to 8.4 percent.
Recent Historical Overview
Between the 1970s and early 2000s, food-at-home prices and food-away-from-home prices increased at similar rates. However, between 2009–2019, their growth rates diverged; while food-at-home prices deflated in 2016 and 2017, monthly food-away-from-home prices rose consistently. Differences between the costs of serving prepared food at restaurants and retailing food in supermarkets and grocery stores partly explains this difference.
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 their prices in 2020.
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 USDA, ERS increased by more than 5 percent, and all food categories grew faster than their historical average rate. Following an outbreak of Highly Pathogenic Avian Influenza (HPAI), egg prices had the largest price increase (32.2 percent) between 2021 and 2022 of any category tracked by USDA, ERS. Beef and veal prices increased the least (5.3 percent) between 2021 and 2022 and generally declined from peak prices in November 2021.
CPI Forecast Changes This Month
The primary forecasting methodology used in the USDA Food Price Outlook changed between December 2022 and January 2023. Data using legacy methods will continue to be published alongside the primary methods until June 2023 but will not be reported in the Summary Findings. The updated primary methods are based entirely on statistical models that are fitted to recent trends in the data. These methods provide wider initial prediction intervals that narrow over the forecast period as more data become available and the degree of uncertainty declines. Discussions of price changes will focus on the midpoint of these forecast intervals (titled “Mid” in the workbooks) and use the lower and upper bounds of a 95-percent prediction interval (based on past data, the 2023 level of inflation is expected to fall in this interval 19 out of 20 times) to reflect the level of uncertainty (titled “Lower” and “Upper” in the workbooks, respectively).
Prices for all food rose 0.2 percent in April 2023. While this price increase for all food was larger than in March 2023, year-over-year price increases continued to slow. Food-at-home prices increased 0.1 percent in April 2023, following a 0.2 percent decrease in March. Food-away-from-home prices increased by 0.4 percent from March to April 2023, and year-over-year food-away-from-home price increases continued to exceed those of food at home. Prices declined for eight food-at-home categories between March and April 2023. The continuing increases in the Federal funds (interest) rate by the Federal Reserve placed downward pressure on prices, and prices for unprocessed agricultural commodities have declined since peaking in May 2022. The effects of these conditions will be closely monitored as they unfold to assess their impacts on food prices.
Retail egg prices decreased 1.5 percent in April 2023 following a 10.9-percent decrease in March and a 6.7-percent decline in February but remained 21.4 percent above April 2022 prices. The ongoing outbreak of HPAI has reduced the U.S. egg-layer flock, as well as the poultry flock to a lesser extent. The outbreak has contributed to elevated egg and poultry prices as over 58 million birds, 325 commercial flocks, and 47 States have been affected. Retail egg prices have declined since peaking in January 2023, in the absence of a confirmed case of HPAI in egg layers since December 2022. Price impacts of the outbreak will be monitored closely. Egg prices are predicted to increase 16.6 percent in 2023, with a prediction interval of 6.0 to 29.3 percent. This wide prediction interval reflects the volatility in retail egg prices.
Prices are expected to continue increasing for nine additional food-at-home categories that showed consistent growth throughout 2022. In 2023, prices are predicted to increase for other meats (5.6 percent), poultry (3.1 percent), dairy products (4.5 percent), fats and oils (11.2 percent), processed fruits and vegetables (8.4 percent), sugar and sweets (9.4 percent), cereals and bakery products (9.9 percent), nonalcoholic beverages (8.9 percent), and other foods (8.8 percent). The prediction intervals of each of these categories are strictly above zero. Price increases exceeded 10 percent between April 2022 and April 2023 for fats and oils, sugars and sweets, and cereals and bakery products.
Beef and veal and fresh fruits prices are now predicted to increase in 2023, though their measures of uncertainty do not rule out either an increase or decrease in prices in 2023. Beef and veal prices rose 1.3 percent in April 2023, the largest monthly increase since October 2021, though prices were still 0.5 percent lower than April 2022. Beef and veal prices are predicted to increase 0.7 percent in 2023, with a prediction interval of -4.1 to 5.9 percent. Fresh fruits prices rose 0.9 percent in April 2023 due to seasonal factors. Prices for fresh fruits are predicted to increase 0.3 percent in 2023, with a prediction interval of -3.0 and 3.8 percent.
Price decreases are expected for pork, though its measure of uncertainty does not rule out either an increase or decrease in prices in 2023. Pork prices are predicted to decrease 2.5 percent in 2023, with a prediction interval of -6.6 to 1.8 percent.
Producer Price Index for Food (not seasonally adjusted)
A Producer Price Index (PPI) resembles a CPI in that it reflects price changes over time. However, instead of retail prices, a PPI provides a measure of the average prices paid to domestic producers for their output. PPIs are reported for nearly every industry in the goods-producing sector of the economy. Three major PPI commodity groups are of interest to food markets: unprocessed foodstuffs and feedstuffs, processed foods and feeds, and finished consumer foods. These farm- and wholesale-level prices give a general sense of price movements across various stages of production in the U.S. food supply chain.
The PPIs are typically far more volatile than the downstream CPIs. Price volatility decreases as products move from the farm to the wholesale sector to the retail sector. Because of multiple processing stages in the U.S. food system, the CPI typically lags movements in the PPI. The PPI is thus a useful tool for understanding what may soon happen to the CPI.
USDA, ERS does not forecast industry-level PPIs for unprocessed, processed, and finished foods and feeds. However, these prices have historically shown a strong correlation with the all-food and food-at-home CPIs.
PPI Forecast Changes This Month
Greater volatility in farm- and wholesale-level prices lead to much wider initial prediction intervals for each of these products. The midpoints of the prediction intervals (representing the expected price change in 2023) of nine PPI categories are negative and four are positive.
Farm-level cattle prices increased 7.9 percent in April 2023 and were 24.8 percent higher than April 2022 due to tightening cattle supplies. Farm-level cattle prices are predicted to increase 20.6 percent in 2023, with a prediction interval of 10.1 to 33.0 percent.
Wholesale pork prices fell 6.8 percent in April 2023 and were 11.9 percent below April 2022 due to an increase in supply and reduced consumer demand. Wholesale pork prices are now predicted to decrease by 8.1 percent in 2023, with a prediction interval of -14.9 to 0.0 percent.
Prices for farm-level eggs fell 37.9 percent in April 2023, continuing a pattern of large monthly changes following an increase of 37.6 percent in March and a decrease of 36.1 percent in February. Eggs fell to 28.3 percent below April 2022, which was the first month where price impacts from the HPAI outbreak appeared in wholesale egg markets. Farm-level egg prices are predicted to decrease 0.3 percent in 2023, with a prediction interval of -27.8 to 52.9 percent. Egg prices are the most volatile category tracked by USDA, ERS, leading to a wide prediction interval.
Wholesale fats and oils prices fell 5.2 percent in April 2023 and were 18.5 percent lower than April 2022. Wholesale fats and oils prices are predicted to decline 19.6 percent in 2023, with a prediction interval of -25.0 to -13.6 percent.
Farm-level vegetable prices jumped 35.1 percent in April 2023 and were 50.9 percent higher than April 2022, partially due to higher input costs. However, prices remain much lower than the peak price in November 2022. Farm-level vegetable prices are now predicted to increase 5.6 percent in 2023, with a prediction interval of -10.9 to 27.3 percent.
Prices for farm-level wheat increased 4.0 percent in April 2023, with its year-over-year price change 28.5 percent below April 2022, a period of historically high prices. Farm-level wheat prices are predicted to decline 14.9 percent in 2023, with a prediction interval of -27.1 to 0.9 percent.
For official USDA farm-level price forecasts, see:World Agricultural Supply and Demand Estimates at a Glance. For additional information, detailed explanations, and analyses of farm-level prices, see USDA Economic Research Service Outlook publications including Livestock, Dairy, and Poultry, Oil Crops, Wheat, Fruit and Tree Nuts, and Vegetables and Pulses.
See the Overview page for Consumer Price Index and Producer Price Index datasets.
