Grocery prices are expected to rise between 3% and 4% in the coming months. And that's on top of all the other increases consumers faced over the past several months.
No food category, the USDA said, decreased in price in 2021. And now the USDA revised its forecast upward for all food categories, including meats, poultry, eggs, dairy products, fats and oils, and more. The only category that the USDA revised downward was fresh vegetables.
Beef and veal had the largest increase and fresh vegetables the smallest. Prices for wholesale beef are predicted to increase between 4% and 7%.
Contributing to the higher retail poultry and egg prices, the report said, is avian influenza. Prices for poultry are predicted to increase by 6% to 7% and 2.5%-3.5% for eggs .
"An ongoing outbreak of highly pathogenic avian influenza could contribute to poultry and egg price increases through reduced supply or decrease prices through lowered international demand for U.S. poultry products or eggs," according to the report.
Strong demand for dairy products is driving up retail prices. The USDA's outlook in 2022 for dairy predicts a 4% to 5% increase.
Also putting pressure on food prices is Russia's invasion of Ukraine and increases in interest rates by the Federal Reserve.
"The impacts of the conflict in Ukraine and the recent increases in interest rates by the Federal Reserve are expected to put upward and downward pressures on food prices, respectively. The situations will be closely monitored to assess the net impacts of these concurrent events on food prices as they unfold," the report said.
Inflation came in at 7.9% for the last 12 months — the highest year-over-year increase since April 1981, according to February's U.S. Consumer Price Index, released in March.
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