The U.S. Department of Agriculture reports that food prices are expected to grow between 2.5% and 3.5% this year.
Food cost breakdown: These are the 2022 growth predictions of food prices according to the USDA:
- At-home food costs: Grocery store prices, or at-home food costs, are expected to grow between 2% and 3% in 2022.
- Away from home costs: Also known as restaurant costs, food-away-from-home costs are expected to grow between 4% and 5%.
- Seafood: Predicted to rise between 3.5% and 4.5%.
- Dairy products: Predicted to increase between 2.3% and 3.5%.
- Fats and oils: Between 3% and 4%.
- Fresh fruit: Between 2% and 3%.
- Processed fruits and vegetables: Between 2.5% and 3.5%
- Cereal and bakery products: Between 2% and 3%.
- Non-alcoholic beverages: Between 1.5% and 2.5%.
- Other foods: Between 1.5% and 2.5%.
The inflation rate is slowing: Although food prices are set to increase this year, the 2022 predictions are much lower than the price increases the country saw in 2020 and 2021, the USDA reported.
- 2020: At-home food prices increased by 3.5%, and away-from-home prices increased by 3.4%.
- 2021: At-home food prices increased by 3.5%, and away-from-home prices increased by 3.4%.
What causes inflation?: Inflation refers to the rise and fall of prices for goods and services. Inflation is caused largely by supply and demand. If consumers have a lot of extra spending money and are buying a lot of a good, the price of that good increases because it’s more difficult for suppliers to meet that demand, according to The New York Times.
- Supply chain problems also contribute to inflation. For example — as stated in previous reporting — the war between Russia and Ukraine is affecting the food supply chain.
- Russia and Ukraine are large suppliers of some of the world’s food products, such as wheat. Ukraine is also a hub for cargo ships that transport goods to the rest of the world, but the ports have been closed due to the war.
- The aftereffects of the pandemic are still affecting food prices. The pandemic resulted in a labor shortage, product shortage, price increases and many other factors that have contributed to rising food costs, according to The New York Times.