USDA Raises Food Price Outlook for 2023

USDA held its 2022 food price inflation outlook steady this month, keeping the increases at 9.5% to 10.5% for all foods, 11% to 12% for food-at-home (grocery store) prices and 7% to 8% for food-away-from-home (restaurant) prices. But USDA made revisions within the food categories used for grocery prices, including lowering the outlook for poultry to an increase of 14% to 15% (14.5% to 15.5% prior) and for vegoils to 18% to 19% (18.5% to 19.5% prior), cereal and bakery products to an increase of 12.5% to 13.5% (13% to 14% prior) and for other food to a rise of 12% to 13% (12.5% to 13.5% prior). USDA raised its egg price outlook due to the ongoing highly pathogenic avian influenza (HPAI) situation, with prices now forecast to climb 30.5% to 31.5%.

For 2023, all food prices are predicted to increase between 3.5% and 4.5% (up from 3.0% to 4.0% in November), food-at-home prices are expected to rise between 3.0% and 4.0% (up from 2.5% to 3.5% previously) and food-away-from-home prices are forecast to climb between 4.0% and 5.0% (unchanged). USDA made several increases in 2023 food categories. The ongoing HPAI situation has USDA also raising its forecast for 2023 egg prices, now putting the expected rise at 4% to 5% versus an outlook for 2% to 3% in November. That marks a sizable rise from USDA’s initial outlook for 2023, which was for egg prices to be unchanged — down 0.5% to up 0.5%. Fruits and vegetable prices are expected up 1% to 2% (unchanged to up 1% prior), with USDA noting “elevated prices for wholesale fresh vegetables are expected to place upward pressure on retail prices in the coming months.” USDA sees vegoil prices rising in 2023 by 5% to 6% even though it lowered the level of increase for 2022.

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