Largest grocery price increase since 2008
Grocery prices will rise by an average of 5.5% this year, the highest inflation rate at the supermarket since 2008, said the Agriculture Department on Monday.
The forecast was an abrupt 2 percentage point increase from last month and was spurred by three months of rapid rises in the prices of many foods.
USDA economists said warfare in Ukraine and higher interest rates would affect food prices but in opposite ways.
Prices for meat, the biggest item on the grocery list, were forecast to rise by 6% this year compared with average meat prices during 2021 — double the usual increase of 2.9% a year. Prices for dairy products were forecast to rise by 6.5%, fresh fruit by 6.5%, and cereals and bakery products by 6.5%. Fats and oils would climb by 8.5% this year, compared with the long-run average of 2.3% a year.
This would be the third year in a row of higher-than-average grocery prices. Normally, they rise by 2% a year.
The monthly Food Price Outlook is available here.