USDA ERS Examines Food Inflation

Retail food prices increased by 3.5 percent in 2021, equal to the rate in 2020 and greater than the historical annual average of two percent from 2000 to 2019. However, USDA’s Economic Research Service expects less inflation this year. USDA projects that prices for food-at-home, purchased typically from grocery stores, will increase between 1.5 and 2.5 percent in 2022, lower than the 3.5-percent increase in both 2020 and 2021. Dairy products and fresh vegetables had significantly slower price increases in 2021 than 2020 and their historical averages. Dairy product prices increased 1.4 percent in 2021 versus 4.4 percent in 2020, and fresh vegetable prices increased by 1.1 percent compared to 2.6 percent in 2020. Conversely, prices in six food categories increased in 2021 at a faster rate than in 2020 as well as in years prior. Meat prices, which rose the most of any included product groups, were driven up by strong domestic and international demand, high feed costs, and supply chain disruptions.

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