Rate of food price inflation could ease in 2022


By DANIEL GRANT

FarmWeek

BLOOMINGTON – Shoppers and diners might see some relief from food price inflation in 2022 after absorbing steep price increases the past year.

But prices for many items likely won’t go down any time soon.

USDA’s Economic Research Service (ERS) predicts the consumer price index (CPI) for all food could increase 2% to 3% in 2022, down from the 2021 forecast of 3-4%.

The CPI for all food increased another half percentage point from October to November and climbed 6.1% higher than November 2020, which marked the highest food price inflation since 2008.

“No food categories have decreased in price in 2021 compared with 2020,” ERS noted in its December food price outlook. “The level of food price inflation varies depending on whether the food was purchased for consumption away from home or at home.”

Food-at-home prices rose 3.1% from January through November 2021 while food-away-from-home prices jumped 4.2% during the same 11-month period.

Those who eat at home can expect food prices to increase another 1.5-2.5% in 2022, closer to historical averages, while food prices away from home are expected to increase 3-4%.

“The beef and veal category has had the largest relative price increase (in 2021),” ERS noted.

Beef and veal prices rose 8.7% through November 2021 while pork prices climbed at a similar clip. ERS projects price inflation in both meat categories could ease to 2 to 3% in 2022.

“Ground chuck and ground beef fell from record prices in October, but still remain elevated,” authors of the CME Group’s Daily Livestock Report noted. “Retail pork prices continued to climb in November, reaching a new record price for the eighth consecutive month.”

Poultry prices followed a similar trajectory as beef and pork, reaching a record broiler composite retail price for the fifth consecutive month in November, according to the Daily Livestock Report.

ERS projects other food categories with some of the largest price increases in 2021 could see a lower rate of inflation in 2022.

Price increases for fresh fruits are projected to decline from a range of 4.5% to 5.5% in 2021 to 1-2% in 2022, while price inflation for fats and oils could ease from a range of 4-5% to 1.5-2.5% during the same time.

(This story was distributed through a cooperative project between Illinois Farm Bureau and the Illinois Press Association. For more food and farming news, visit FarmWeekNow.com.)

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