Retail prices for fresh produce and all food categories are running above historical averages, reports USDA. Grocery food inflation for all of 2022 is expected to average between 5% and 6%, according to the latest USDA Food Price report. In March alone, retail grocery prices were a stunning 10% higher compared with a year ago.
The report said food-away-from-home prices are predicted to increase between 5.5% and 6.5% in 2022. Restaurant food prices were running 6.9% above year-ago levels in March. Those price hikes for retail and restaurant food are above the increases recorded for both 2020 and 2021, the USDA said.
The report said the inflation rate for all food increased 1% from February 2022 to March 2022, and food prices were 8.8% higher than in March 2021. For 2022, the inflation rate for all food is forecast at 5% to 6%, compared with 3.9% for last year and 2.4% for the 20-year average.
Digging in a bit further, the overall retail inflation rate for fruits and vegetables is predicted to range between 4.5% to 5.5% in 2022, up from 3.3% inflation in 2021 and the 20-year average of 2%.
At the grower level, the USDA said farm-level inflation was running even higher than at retail. Farm-level vegetable prices increased by 42.4% in March 2022 and reached 81.5% above the prices observed in March 2021, according to the report. For the entire year, farm-level vegetable prices are predicted to increase between 8% and 11% in 2022.
Farm-level fruit prices in March were 8% lower than in February but still 18.5% higher than in March 2021. Farm-level fruit inflation for 2022 is expected to range from 12.5% to 15.5%, compared with an inflation rate of 5.3% in 2021 and the 20-year historical average of 2.4%.
Editor’s Take:
With these unprecedented increases in just food prices, not to mention gas, clothing, auto and housing prices, it is no wonder most consumers are feeling the pinch. As we have pointed out in prior issues of the AIR, real wages are simply not keeping pace with this type of inflation, and people are being forced to make decisions about what they can or cannot purchase. It is not unreasonable to believe that they will soon stop purchasing large ticket, discretionary items such as homes and vehicles. Then who will be your best customer prospects – farmers/ranchers! Especially when you show them the money – AgPack!
