All food prices are projected to climb again this year but at a slower pace, according to economists at USDA.
“We saw very high increases in food at home prices in 2022. The percent price increase was 11.4 percent, which is a level or a percent increase that we hadn’t seen in about 40 years. This has led us to have relatively high expectations for price increases this coming year because we aren’t seeing price decreases for food at home yet in December. They increase by three percent so our forecasted food at home price increase for 2023 is 8 percent with a prediction interval or a range of uncertainty between 4.5 And 11.7 percent,” said Matt MacLachlan, USDA economist.
When it comes to food away from home, MacLachlan says the inflation rate is not coming down as quickly.
“For food away from home, the inflation rate isn’t coming down as fast as those other categories, so even though we only saw a 7.7 percent increase for this category, our forecasting models are telling us that we should expect similar food price increases for next year. Our point estimate is 8.2 percent with a prediction interval of 6.7 to 9.7 percent.”
Officials at USDA say they are using a new system to generate these projections which is why there is such a wide range of results. They remind everyone there is still a lot of time for these results to change when considering events like the current HPAI outbreak the Fed’s interest rate hikes.
