WASHINGTON, D.C. (RFD NEWS) — New details on consumer food prices are emerging as the U.S. Department of Agriculture (USDA) Economic Research Service releases its latest Food Price Outlook.
USDA estimates overall food prices will increase 3.1 percent this year. Grocery store prices, or food consumed at home, are expected to rise 2.5 percent, while prices for food away from home — including restaurants — could climb 3.7 percent.
Economists say the data show food prices increased at roughly the same pace as overall inflation over the past year. The projections are based primarily on data from the Consumer Price Index and the Producer Price Index.
Prices Tracking Inflation
The forecast incorporates the January 2026 Consumer Price Index and the December 2025 Producer Price Index, the most recent datasets available at the time of release. USDA notes food prices have been rising at roughly the same pace as overall inflation.
From December 2025 to January 2026, the Consumer Price Index rose 0.4 percent, with food prices rising by the same amount. Compared to a year earlier, food prices were 2.9 percent higher.
- Food-at-home prices were up 2.1 percent year over year
- Food-away-from-home prices were up 4.0 percent year over year
Beef Prices Remain a Key Driver
Among food categories, beef and veal prices remain elevated, even after a slight monthly dip. USDA reports beef prices were 15 percent higher in January 2026 than a year earlier, reflecting tight cattle supplies and continued strong consumer demand.
Beef and veal prices are forecast to increase 5.5 percent in 2026, with wide uncertainty depending on cattle herd expansion and market conditions.
Eggs Expected to Drop Sharply
In contrast, egg prices are expected to fall significantly. Retail egg prices dropped more than 34 percent year over year in January 2026 as production recovered following Highly Pathogenic Avian Influenza outbreaks in late 2024 and early 2025.
USDA projects egg prices will decline 27.4 percent in 2026, as flock sizes and output continue to rebound.
Other Grocery Trends
USDA forecasts price increases in several grocery categories, including:
- Sugar and sweets: up 6.7 percent
- Nonalcoholic beverages: up 5.2 percent
- Cereal and bakery products: above historical averages
Meanwhile, poultry prices are expected to remain relatively flat, while pork prices are projected to rise modestly.
Why It Matters
USDA says the Food Price Outlook serves as a critical signal for farmers, processors, wholesalers, retailers, and consumers, offering a forward-looking view of inflation pressures across the food supply chain. The outlook tracks annual average price changes rather than month-to-month inflation.
This marks the first Food Price Outlook release in several months, following delays caused by last fall’s government shutdown.
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