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Retail food prices projected to rise

Food-at-home CPI growth still historically low, USDA says

Russell Redman

January 3, 2019

2 Min Read
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Food prices are on their way up at the grocery store this year, according to projections by the U.S. Department of Agriculture.

The USDA Economic Research Service forecasts the food-at-home consumer price index (CPI) to rise 1% to 2% in 2019. Though that’s higher than the 0% to 1% uptick estimated for 2018, the increase expected for 2019 would mark the fourth straight year of deflating or lower-than-average inflating retail food prices, the agency noted in its Food Price Outlook 2018-19 report. The gain also would be less than the 20-year historical average of 2.1%.

Product categories likely to see price increases this year include dairy products ( 3% to 4%), fresh vegetables ( 2.5% to 3.5%), fresh fruit ( 2% to 3%), cereals and bakery products ( 2% to 3%), beef and veal ( 1% to 2%), poultry ( 1% to 2%), fish and seafood ( 0.25% to 1.25%), and sugars and sweets (0% to 1%).

The expected rise in dairy prices for 2019 comes after a flat to 1% decrease estimated for 2018, according to the USDA.

“Milk production is expected to rise at a modest rate of 1.1% in 2018. Dairy exports have strengthened but are expected to be limited for the rest of the year due to recent tariffs imposed by Mexico and China,” the report said. “Domestic demand for most dairy products has been relatively weak in the first half of the year but is expected to recover in the second half of 2018.”

Egg prices — among the most volatile retail food prices due to changes in seasonal demand — are projected to inch up 1% or less in 2019 following an estimated 10% to 11% jump in 2018. The USDA said recent price hikes at the farm and wholesale levels indicate that retail egg prices could continue to rise over the next few months. That contrasts with 2017, when more egg-laying birds and a higher number of eggs per hen eased prices, the agency explained.

Food categories that may experience retail price decreases include fats and oils (-3% to -2%), pork (-0.75% to 0.25%), other meats (-0.25% to 0.75%), processed fruits and vegetables (-1% to 0%), and nonalcoholic beverages (-0.25% to 0.75%).

“In addition to commodity prices, prices for other factors of production may influence retail food prices in 2019,” the USDA said in the report. “Electricity and diesel costs, as well as many other costs associated with food production, transport, and retail sales, are expected to rise, placing upward pressure on prices.”

Meanwhile, the USDA expects food-away-from-home prices — food purchased at restaurants — to grow at a consistent rate this year, rising 2% to 3%, the same increase estimated for 2018.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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