What's causing food price inflation to cool down?

Participants: Gary Crawford and USDA economist, Megan Sweitzer.

TRANSCRIPT

Food at home or grocery store food prices.

They normally go up about 2 1/2% every year, but in 2022 it was about 11 1/2%.

2023, 5%.

And what's expected for this year?

We're expecting food at home prices to increase by 1.6%.

Economist Megan Schweitzer tracks food prices for the agriculture department.

She says a lot of factors have come into play since 2022 to whittle away at food price inflation rates.

We saw commodity prices ease from their highs in 2022.

Energy and fertilizer prices have both come down quite a bit.

The Fed has raised the federal funds rate, which helps to temper inflationary factors across the economy, including some of those that impact food price changes.

So these factors are behind the forecast for moderate food price growth, not an actual decline in overall food prices though, although Megan says it's not out of the realm of possibilities.

Gary Crawford for the U.S. Department of Agriculture.