2023 Final Projections
USDA’s projections for all food prices in 2023 now show an increase of 5.8%. The agency says that grocery (food-at-home) prices are predicted to increase by 5.2%. Restaurant (food-away-from-home) prices are predicted to increase by 7.1%.
Prices are expected to increase for 12 grocery categories: beef and veal (4%), other meats (4.6%), poultry (3.4%), fish and seafood (0.4%), dairy products (4%), fats and oils (9.3%), fresh vegetables (0.9%), processed fruits and vegetables (8.5%), sugar and sweets (8.9%), cereals and bakery products (8.5%), nonalcoholic beverages (7.2%) and other foods (6.8%).
Retail prices for fresh fruits are predicted to increase by 0.5% and fresh vegetable prices are predicted to increase 0.9%.
2024 Food Price Forecasts
USDA economists said in the forecast that food prices are expected to continue to decelerate but not decline in 2024. In 2024, all food prices are predicted to increase 2.9%. Grocery food prices are predicted to increase by 1.6%, and restaurant food prices are predicted to increase by 4.3%.
EDITOR’S TAKE:
Food and beverage companies’ financial performance has largely relied on price increases at the expense of volume sales over the last year. That approach is rapidly running out of road, and the limits of price elasticity will slow further increases. But elevated prices will continue to impact consumer shopping behavior in the coming year. Cost-saving behaviors including purchasing from lower-cost retailers, trading down to private label brands and value shopping are likely to linger. Modest volume growth in food and beverage is likely as several factors are improving, including inflation.
Although food inflation may slow in 2024, according to USDA predictions, prices will still be escalating. That means consumers will remain challenged unless real wages rise faster than the expected rate of inflation. As it stands today, consumers nationwide are spending an additional $700 per month more to purchase the same bundle of items versus January 2021. That has placed many families under financial stress, causing them to max out credit cards and dig into their savings. Many families are forced to make tough choices when it comes to larger ticket items, such as housing and transportation. If USDA is accurate, 2024 could mean those strains on family budgets become even greater.
Farmers and ranchers, however, had a near record net farm income year in 2023. And 2024 is expected to be well above the five-year trend for income. This translates that farmers/ranchers are your best customer prospects in 2024. Make sure you’re targeting them through AgTruckTrader.com.
