Back in January USDA Economist Matthew MacLachlan was forecasting that retail food price inflation this year would finally cool down from the 3.5% increases in 2020, and also in 2021, and was projecting food price hikes this year would run only between 1.5 and 2.5%.
Those projections four months ago are far removed from the April forecast for 2022 food prices.
"For all food, we're looking at price increases between 5 and 6%. For food at home, we're also looking at a 5 to 6% price increase. For food away from home, we did not adjust this past month, and is projected to be between 5.5 and 6.5%,” Maclachlan says.
Released this week, the Consumer Price Index for Food cites the impacts from the conflict in Ukraine and the recent increases in interest rates by the Federal Reserve are expected to put upward and downward pressures on food prices, respectively. The situations will be closely monitored to assess the net impacts of the concurrent events on food prices as they unfold.
"We have somewhere in the double digits of gasoline, and other fuel price increases. The conflict going on in Ukraine, which is contributing to higher wheat, higher flour and higher downstream prices," Maclachlan says. "We have an outbreak of highly pathogenic avian influenza, and that specifically affects the prices of poultry, meat and eggs."
The cost of feed, fertilizer and farm chemicals is also driving up the price of food, as well as the increased cost to hire people to work in food processing centers, Maclachlan notes.
Prices for all meat categories increased by a percent or more between February 2022 and March 2022. While wholesale beef prices decreased by 3.6% in March 2022, retail beef prices increased by 1.%. Wholesale pork prices, along with port congestion, contributed to a 1.4% increase in retail pork prices in March 2022.
In 2022, beef and veal prices are now predicted to increase between 6 and 7%; pork prices are predicted to increase between 4 and 5%; and other meat prices are predicted to increase between 3.5 and 4.5%. The aggregate categories of meats, poultry and fish are predicted to increase between 5.5 and 6.5%, and meats are predicted to increase between 4.5 and 6.5% in 2022.
Retail poultry prices have been high, with historically low stocks of frozen chicken. Egg prices increased by 1.9% in March 2022, following a 2.2% increase in February. An ongoing outbreak of highly pathogenic avian influenza could contribute to poultry and egg price increases through decreased supply or prices could be reduced by a drop in international demand for U.S. poultry. Any price impacts of the outbreak will be monitored closely. Poultry prices are now predicted to increase between 7.5 and 8.5%, and egg prices are predicted to increase between 6 and 7%.
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