While the consumer price index (all food) rose a modest 1.4 percent in 2013, it is likely to rise 2.5 to 3.5 percent in 2014, USDA economists predicted, who also said food price inflation will “return to a range closer to the historical norm.”
While the price of food eaten away from home edged up a bit, retail food prices were flat in 2013 with higher prices for poultry, eggs, fish, and fresh vegetables offset by falling prices for nonalcoholic beverages, sugar and sweets, fats and oils, and other meats, according to USDA’s Economic Research Service. From January to December 2013, average supermarket prices fell by 0.2 percent. Meanwhile, several agricultural commodity prices, particularly sugar and coffee, decreased, fuel prices were moderate, and exports decrease for several major U.S. commodities.
But, ERS said the outlook could change for 2014. “Inflationary pressures are expected to moderate, given the outlook for commodity prices, animal inventories, and ongoing export trends. Retail marketing, having contracted since the drought, may expand in 2014 if input prices rise, which should contribute to inflation,” ERS said.
“The food, food-at-home, and food-away-from-home consumer prices indexes are expected to increase 2.5 to 3.5 over 2013 levels. The forecast is based on an assumption of normal weather conditions; however, severe weather events could potentially drive up food prices beyond the current forecasts. In particular, the ongoing drought in California could potentially have large and lasting effects on fruit, vegetable, dairy, and egg prices,” ERS said.
