Food Inflation Is Eating Up Grocery Budgets

High food prices on American supermarket shelves are reflecting one of the biggest inflation surges in decades. 

In fact, the prices of groceries this year have spiked to record-breaking levels—and the rising costs aren’t stopping. Grocery cost increases are predicted to continue to soar to around 11 percent within the calendar year, marking the highest spike over a 365-day period since a nearly 15-percent price increase that happened in 1974. 

As far as high prices go, some foods are impacted more. Data shows that products such as fresh fruit, beef and seafood actually encountered a price decrease on average this year. Other commodities, including oils and other fats, dairy products and eggs, cereals and baked goods, as well as both fresh and produced vegetables have increased the most in cost. 

Eggs—a grocery staple in houses across the nation—were forecasted to undergo a price increase of more than 25 percent this year, compared to a 3.2-percent increase on an average year. One of the worst-ever avian flu outbreaks that swept across the US is a large factor in the above-average egg price increase for 2022. 

Cereal and baked good price increases are set to hit 13.5 percent—as compared to the normal two-percent year-to-year price rise. The war in Ukraine, a huge exporter of wheat, along with  droughts, flooding and extreme weather events in other growing regions, are some reasons for the raised prices of these goods. 

According to data released by the US Bureau of Labor and Statistics, edible oil and fat prices rose more than 20 percent—leaving prices for popular oils such as soybean, canola and palm at an all-time high earlier this year. The increase here can be credited in part to export bans across the supply chain and inhospitable weather conditions for growing crops to produce the oil. 

Luckily for consumers, there is hope that a decrease in steep inflation is around the corner. Oils and fat prices are already undergoing small decreases after hitting their peak this summer. And a forecast provided by the USDA’s Economic Research Services shows food price inflation decreasing to a closer-to-average rate of increase, 2.5 percent, by the end of 2023.