ERS hikes 2021 food price outlooks
The all-items consumer price index (CPI) climbed 0.5 points from June to July before seasonal adjustment, with the measure of economy-wide inflation up 5.4% from year-ago levels, according to USDA’s Economic Research Service (ERS). The CPI for all food climbed 0.7 points from June to July, with food prices up 3.4% from July 2020 levels.
The food-away-from-home CPI rose 0.8 points last month, with restaurant purchase prices up 4.6% from year-ago. The CPI for food-at-home (grocery store) purchases rose 0.6 points from June, with prices up 2.6% from year-ago in July. Seven months into 2021, food-at-home prices have climbed 1.9% and food-away-from-home prices have risen 3.1%, with the CPI for all food up an average of 2.4%. Of note, ERS comments, “No food categories have decreased in price in 2021 compared to 2020.”
ERS made upward revisions to its 2021 food inflation forecasts for all food, restaurant and grocery store prices. It now calls for food-at-home prices to climb 2.5% to 3.5%, topping the 20-year historical average of 2.0% inflation. Food-away-from home prices are expected to climb 3.5% to 4.5%, well above the 20-year average of 2.8%. Those increases lifted ERS’s 2021 inflation outlook for all foods to 3.0% to 4.0%, topping the average increase of 2.4% over the past 20 years. ERS is still calling for a 2.0% to 3.0% rise in all food prices in 2022.
“Forecast ranges for 12 of the 22 CPI food categories were revised upward this month, including those for beef and veal, pork, poultry, fish and seafood, dairy products, fats and oils, and sugar and sweets,” ERS comments.
