Upward revisions to food at home (grocery store) price forecasts for several food categories prompted USDA's Economic Research Service (ERS) to up their forecast rise in grocery store prices to an increase of 1.5% to 2.5% in 2021 versus 2020--the midpoint is right in line with the 20-year average of 2.0%.
Overall food price inflation is still forecast at 2% to 3% (2.4% 20-year average) with food away from home (restaurant) prices seen rising 2.5% to 3.5% (2.8% 20-year average) from 2020 levels.
So far this year, overall food prices are up 1.7% from the same period in 2020, with grocery store prices up 1.2% and restaurant prices up 2.4%.
“Forecast ranges for meat categories, poultry, eggs, dairy products, fats and oils, and fresh fruits were also revised upward,” USDA noted, with only fish and seafood forecasts left steady with the month-ago outlook. “Forecast ranges for cereals and bakery products, nonalcoholic beverages, and other foods were revised downwards” compared with USDA's month-ago forecasts.
“The meat and poultry price increases were driven by high feed costs and strong domestic and international demand,” USDA said. “In addition, winter storms and drought disrupted the beef supply, and high prices for sows dampened pork production.”