USDA’s Economic Research Service (ERS) is forecasting grocery store prices (food at home) to rise between 0 and 1 percent in 2017, in contrast to the 1.3-percent decline in retail food prices in 2016.
Poultry prices are expected to rise 1.5 to 2.5 percent, dairy prices could increase between 2 and 3 percent, and cereal and bakery product prices are expected to rise as much as 1.25 percent in 2017. On the other hand, consumers are expected to face lower prices in 2017 for beef and veal, eggs, and fruits and vegetables. Prices for beef and veal may decrease as much as 2.5 percent, egg prices are expected to drop 3 to 4 percent, and consumers could pay up to 0.5 percent less for fruits/vegetables.
These forecasts are based on an assumption of normal weather conditions. Severe weather or other unforeseen events could drive-up food prices beyond the current forecasts. Conversely, a strengthening U.S. dollar could continue to make the sale of domestic food products overseas more difficult. This would increase the supply of foods on the domestic market, placing downward pressure on retail food prices.
More information on ERS’s food price forecasts can be found in ERS’s Food Price Outlook data product, updated February 23, 2017.
