Consumer food costs are increasing and USDA has raised its forecast for overall food price inflation and its outlook for food at home (grocery store) and food away from home (restaurant) prices. Overall food price inflation is now seen at 2.5% to 3.5% in 2021, up from their month-ago outlook that food price inflation would be 2% to 3%. Grocery store prices are now seen rising 2% to 3% in 2021 compared with their month-ago outlook that grocery store price would rise 1.5% to 2.5%.
Restaurant prices are now seen up 3% to 4% from 2020 levels, an increase from the prior outlook that they would increase 2.5% to 3.5%.
The updated forecasts also mean that prices are seen rising for all three categories by more than their 20-year average. Those averages are 2.4% for all food prices, 2.8% for restaurant prices, and 2% for grocery store prices.
However, it is important to note that leading up to 2020 and now 2021, consumers saw grocery store prices either increasing at less than the 20-year average or decreasing over the 2015 to 2019.