Retail Food Prices to Rise

Dairy and bakery product price increases will lead the way.

Grocery Store

Recent projections by the U.S. Department of Agriculture indicate that grocery store food prices could increase in 2019. The USDA Economic Research Service forecasts these store's consumer price index could rise by as much as two percent. This is higher than the less than one percent uptick estimated for 2018, and 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 percent.

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

Egg prices are projected to increase by no more than one percent in 2019 following an estimated 10 percent jump last year. 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. 

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

“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.”

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