Food Inflation Could Hit 9.6 Percent in 2023, USDA Says

Irvine residents at H Mart in Irvine, Calif., on Jan. 11, 2023. John Fredricks/The Epoch Times

The U.S. Department of Agriculture (USDA) predicts food prices for the year will hit 9.6 percent, according to the department’s  Food Price Outlook report published in late March.

Overall, food prices are expected to grow more slowly in 2023 than they did in 2022, but remain above historical average rates, according to the report.

Forecasts now include a midpoint and a prediction interval to represent the expected price change and range of likely prices.

In 2023, the USDA said all food prices are predicted to increase 7.5 percent, with a prediction interval of 5.5 percent to 9.6 percent.

Food price inflation is divided into two groups: “Food at home” index tracks how prices have changed for food found in grocery stores, while “Food away from home” index tracks how prices have changed for restaurant purchases.

According to the forecast, grocery food prices are predicted to increase 7.8 percent, with a prediction interval of 5.3 percent to 10.5 percent. Food-away-from-home prices are predicted to increase 8.3 percent, with a prediction interval of 7.2 percent to 9.3 percent, the report said.

Egg Prices Forecast to Lead 2023 Increases

Economists see eggs continuing to lead with a 29.6 percent increase in 2023, with a prediction interval of 13.4 to 48.9 percent, while beef and pork prices decrease about 1 percent.

A test tube labeled "Bird Flu" and eggs in a picture illustration, on Jan. 14, 2023. Dado Ruvic/Illustration/Reuters

The surge in egg prices was largely due to shortages driven by the highly pathogenic H5N1 avian influenza that’s resulted in the deaths of nearly 58 million chickens and turkeys since early 2022, according to the U.S. Department of Agriculture.

Most of the birds culled to stop the epidemic have been egg-laying hens, causing the price of eggs to skyrocket and availability to plummet.

Inflation by Food Category

Here is what the agency predicts for prices in various food categories for 2023:

• Eggs: up 29.6 percent.
• Fats and oils: up 15.4 percent.
• Processed fruits and vegetables: up 11.4 percent.
• Sugar and sweets: up 11.1 percent.
• Cereals and bakery products: up 11.7 percent.
• Nonalcoholic beverages: up 10.7 percent.
• Beef and veal: down 1 percent.
• Pork: down 0.8 percent.
• Other meats: up 4.5 percent.
• Poultry: up 3.4 percent.
• Dairy products: up 6.4 percent.
• Fats and Oils: up 15.4 percent.
• Processed fruits and vegetables: up 11.4 percent.
• Fresh fruits: 0.6 percent.
• Fresh vegetables: down 1.1 percent.
• Other foods: up 8.5 percent.

Consumer Shifts

Consumers are changing their behavior to cope with rising food prices. According to a study from the University of Illinois Urbana-Champaign, consumers on average engaged in 3.4 practices to save money on food. This includes buying cheaper brands, spending less money on non-food items, cutting down on eating out, changing the types of food they purchase, and so on.

People with lower incomes reported skipping meals or reducing purchases of vegetables, fruits, and protein to cope with high food prices, the survey said.

The food inflation comes at a time when the federal government recently stopped providing extra food benefits, removing at least $95 from monthly budgets for Americans in 32 states.