The U.S. Department of Agriculture’s Economic Research Service (ERS) released the latest Consumer Price Index (CPI) data this week. The CPI for April 2020 decreased 0.7% from March 2020 and was 0.3% above the April 2019 level. The CPI for all food was up 1.5% between March and April 2020, and food prices were 3.5% higher than the April 2019 level.
The degree of food price inflation varies depending on whether the food was purchased for consumption away from home or at home, USDA said. The food-away-from-home (restaurant purchases) CPI increased 0.1% in April and was 2.8% higher than a year ago, while the food-at-home (grocery store or supermarket food items) CPI increased 2.7% from March to April 2020 and was 4.1% higher than last April.
ERS specifically noted that the newly released April CPI numbers indicate that the month-over-month inflation rate for food-at-home prices was higher than any month since 1990, while food-away-from-home prices were nearly flat.
“For the past several years, inflation for food-at-home prices had been slower than for food-away-from-home prices; however, the effects of the COVID-19 pandemic have ended that trend,” the agency said.
Compared to 2019, food-at-home prices so far in 2020 have increased 1.8%, and food-away-from-home prices have increased 1.9%. The CPI for all food has increased an average of 1.9%. Of all the CPI food categories, eggs saw the largest relative price increase, at 7.4%, while fresh fruits had the largest relative price decrease, losing 1.7%.
Given the relatively large increase in food-at-home prices in April, the forecast has been revised upward. For 2020, food-at-home prices are now expected to increase 2.0-3.0%, and food-away-from-home prices are still expected to increase between 1.5% and 2.5%.
Majority of forecast revised upward
In the latest report, ERS revised 18 of the 22 CPI forecasts upward in response to the April CPI numbers.
The CPI for meats, poultry and fish increased 3.9% from March to April and was up 6.2% from April 2019.
“The closures of many meat processing facilities has put upward pressure on retail meat prices despite abundant farm-level meat supplies,” USDA noted.
The CPI for meats, poultry and fish is up 2.5% year to date, while ERS revised the index higher for 2020 and is expected to change in a range of 2.0-3.0%.
USDA also revised the 2020 forecast for eggs upward again. The egg CPI increased 15.0% from March to April and was up 17.3% from April 2019. The egg CPI is up 7.4% year to date already. Despite high wholesale egg prices and strong demand in recent weeks, USDA said the table-egg layer flock is not expected to expand, which will keep upward pressure on prices. The 2020 egg CPI is expected to increase between 8.0% and 9.0%.