USDA Lowers Rate of Increase For Grocery Store Price Outlook

USDA now expects food price inflation for food at home (grocery store prices) to be 0.5% to 1.5%, down from their prior outlook for those prices to increase 1% to 2% in 2019 compared to 2018. USDA economists followed a similar pattern with their forecast for 2018 grocery store prices, initially setting the outlook at one percent to two percent, but trimming it to 0.5% to 1.5% in February 2018 with another revision down to steady to up 1% in July. Grocery store prices in 2018 ended up rising 0.4% after having posted annual declines in 2017 and 2018. Compared to February, USDA analysts downgraded their outlooks for several commodities relative to grocery store prices, including meats, poultry and fish, dairy products and fruits and vegetables. USDA trimmed the forecast decline in egg prices and increased its outlook for cereals and bakery products and nonalcoholic beverages. USDA did not change its outlook for overall food price inflation, leaving it at 1.5% to 2.5% compared with a 20-year average of 2.3%.