Examining the 2025 food price outlook, analyzing Consumer Price Index and Producer Price Index data to forecast changes in food costs for consumers.
For detailed datasets on the Consumer Price Index and Producer Price Index, including recent price fluctuations and projected changes across various food categories, please refer to our Overview page.
Consumer Price Index (CPI) Trends for Food
The Consumer Price Index (CPI), a key indicator of overall inflation in the economy, remained stable from November to December 2024, showing a 2.9 percent increase compared to December 2023. The CPI for all food categories saw a slight rise of 0.2 percent from November to December 2024. Overall, Food Prices were 2.5 percent higher than they were in December of the previous year.
Interestingly, the rate of food price inflation differs depending on where the food is consumed: at home or away from home.
- Food-at-home, which refers to groceries purchased from supermarkets, experienced a CPI increase of 0.1 percent from November to December 2024. These prices were 1.8 percent higher than in December 2023.
- Food-away-from-home, encompassing restaurant purchases, showed a CPI increase of 0.3 percent in December 2024, marking a 3.6 percent increase from December 2023.
Looking ahead to 2025, projections indicate that overall food prices are expected to increase at a similar rate to 2024, but at a more moderate pace than the average historical growth rate. For 2025, the forecast suggests a 2.2 percent rise in all food prices, with a prediction range between a decrease of 0.4 percent and an increase of 4.9 percent. Specifically, food-at-home prices are predicted to increase by 1.3 percent, with a range from a potential decrease of 2.7 percent to an increase of 5.5 percent. Food-away-from-home prices are expected to see a larger increase of 3.6 percent, with a predicted range of 2.0 to 5.1 percent.
The Food Price Outlook uses statistical models based on recent data trends to forecast the annual percentage change in food prices. These forecasts are regularly updated, and prediction intervals become narrower as more data becomes available, reducing uncertainty. The focus is on the midpoint of these forecast ranges, while the prediction intervals (95-percent) provide a measure of uncertainty. For a deeper understanding of the forecasting methods, refer to the article “ERS Refines Forecasting Methods in the Food Price Outlook.
Historical Trends in Food Prices
Historically, from the 1970s to the early 2000s, food-at-home prices and food-away-from-home prices grew at comparable rates. However, a divergence occurred between 2009 and 2019. During this period, food-at-home prices even saw deflation in 2016 and 2017, while food-away-from-home prices consistently increased each month. This difference can be attributed to varying costs associated with restaurant food preparation versus grocery retail.
In 2020, both categories converged again, with food-at-home prices rising by 3.5 percent and food-away-from-home prices by 3.4 percent. This convergence was largely due to the COVID-19 pandemic, which caused a rapid surge in food-at-home prices, especially for meats and poultry, while inflation for food-away-from-home remained stable compared to 2019. In 2021, overall food prices increased by 3.9 percent, with price acceleration in the latter half of the year.
2022 witnessed a significant jump in food prices, increasing by 9.9 percent – the highest annual increase since 1979. Food-at-home prices soared by 11.4 percent, and food-away-from-home prices increased by 7.7 percent. This surge was partly driven by a highly pathogenic avian influenza (HPAI) outbreak affecting egg and poultry prices, compounded by the war in Ukraine and wider inflationary pressures like high energy costs.
In 2023, food price increases slowed to 5.8 percent as economy-wide inflation, supply chain disruptions, and wholesale food costs began to ease from their 2022 peaks. This trend continued into 2024, with food price growth further decelerating to 2.3 percent, influenced by cooling labor markets, lower energy costs, and shifts in consumer demand. Food-at-home prices saw a modest increase of 1.2 percent in 2024, below the historical average, while food-away-from-home prices rose by 4.1 percent, slightly above their historical average.
December 2024 CPI Forecast Changes
In December 2024, food-at-home prices edged up by 0.1 percent compared to November. Price increases were observed in ten food-at-home categories, while five categories saw price decreases. Year-over-year, compared to December 2023, four food-at-home categories experienced lower prices: fish and seafood, fresh fruits, processed fruits and vegetables, and other meats.
For 2025, most food categories are expected to see price changes below their 20-year historical average. Prices are predicted to rise for ten food-at-home categories and fall for five. Falling input costs, particularly for energy, contrast with rising prices for unprocessed agricultural commodities. The impact of these factors will be closely monitored for their effects on food prices.
Trends in consumer food prices, showing percentage changes from 2021 to 2025 projections.
Beef and veal prices saw a decrease of 0.2 percent in December 2024, following a 1.7 percent increase in November. However, they remained 4.9 percent higher than in December 2023. While beef and veal price increases are expected to moderate from 2024 levels, they are still predicted to rise in 2025 due to higher input costs and limited supply. Beef and veal prices are forecast to increase by 1.5 percent in 2025, with a prediction interval ranging from a decrease of 6.8 percent to an increase of 11.1 percent.
Pork prices fell by 1.3 percent in December 2024, influenced by seasonal trends, but were 1.8 percent higher than in December 2023. Pork prices are predicted to decrease slightly by 0.8 percent in 2025, with a prediction interval from a decrease of 8.5 percent to an increase of 7.5 percent.
Retail egg prices jumped by 8.4 percent in December 2024, continuing to show significant month-to-month volatility. The ongoing HPAI outbreak, with recent cases in January 2025, has reduced the U.S. egg-layer flock, contributing to these elevated prices. Despite being 36.8 percent higher in December 2024 than December 2023, egg prices are still below their January 2023 peak. Egg prices are predicted to rise sharply by 20.3 percent in 2025, with a wide prediction interval from a slight increase of 0.1 percent to a substantial rise of 45.3 percent.
Dairy product prices increased by 0.2 percent in December 2024 and were 1.3 percent higher than December 2023. These prices have been on an upward trend since the latter half of 2024, driven by higher farm and wholesale prices, partly due to reduced milk production. After a slight decrease of 0.2 percent in 2024, dairy product prices are expected to increase in 2025. Dairy product prices are predicted to increase by 1.3 percent in 2025, with a prediction interval from a decrease of 3.4 percent to an increase of 6.2 percent.
Fresh fruit prices decreased by 2.1 percent in December 2024, partially due to typical seasonal patterns. They were 0.2 percent lower than in December 2023, mainly due to lower prices for bananas and citrus fruits. Fresh fruit prices are expected to grow slower than their historical average in 2025. Fresh fruit prices are predicted to increase by 0.7 percent in 2025, with a prediction interval from a decrease of 4.4 percent to an increase of 6.3 percent.
Prices also fell in December 2024 for fats and oils (by 0.7 percent) and nonalcoholic beverages (by 0.4 percent). Fats and oils are expected to see price declines in 2025, while nonalcoholic beverage prices are forecast to increase at a slower rate than their historical average. Prices for fats and oils are predicted to decrease by 1.6 percent in 2025, with a prediction interval from a decrease of 7.7 percent to an increase of 5.0 percent. Prices for nonalcoholic beverages are predicted to increase by 1.5 percent in 2025, with a prediction interval from a decrease of 2.3 percent to an increase of 5.5 percent.
Producer Price Index (PPI) Insights for Food
The Producer Price Index (PPI) tracks price changes over time, similar to the CPI, but measures the average prices received by domestic producers for their output rather than retail prices. PPIs are available for most goods-producing sectors. In the food market, three key PPI commodity groups are particularly relevant: unprocessed foodstuffs and feedstuffs, processed foods and feeds, and finished consumer foods. Farm-level and wholesale-level prices from these groups offer insights into price movements across different stages of the U.S. food supply chain.
PPIs are generally more volatile than CPIs, as they are measured earlier in the supply chain. Volatility tends to decrease as products move from farms to wholesale and then to retail. Due to the numerous processing stages in the U.S. food system, CPI changes typically lag behind PPI changes. Therefore, the PPI serves as a valuable tool for anticipating future CPI trends.
It’s important to note that USDA, ERS does not provide industry-level PPI forecasts for unprocessed, processed, and finished foods and feeds. However, historical data shows a strong correlation between these PPIs and the overall food and food-at-home CPIs.
December 2024 PPI Forecast Changes
In 2025, PPI forecasts indicate price increases for eight categories, decreases for four, and no change for one. Greater volatility at the farm and wholesale levels results in wider prediction intervals compared to retail-level forecasts.
Wholesale poultry prices decreased significantly by 4.0 percent in December 2024, reversing a 4.3 percent increase from November. However, prices were still 4.4 percent higher than in December 2023. Wholesale poultry prices are predicted to decrease by 1.4 percent in 2025, with a prediction interval from a decrease of 14.1 percent to an increase of 13.8 percent.
Farm-level egg prices rose by 3.4 percent in December 2024, following a dramatic 54.3 percent spike in November. The ongoing HPAI outbreak continues to cause significant monthly fluctuations in farm-level egg prices, with prices in December 2024 being 134.5 percent higher than in December 2023 (when prices were low after a lull in the outbreak). Farm-level egg prices are predicted to increase sharply by 45.2 percent in 2025, with a very wide prediction interval from a decrease of 30.9 percent to a substantial increase of 228.8 percent, reflecting the high volatility in this category.
Farm-level milk prices fell by 4.9 percent in December 2024, despite rising throughout most of 2024. Prices were 11.7 percent higher than in December 2023, partly due to reductions in dairy cattle herds. Farm-level milk prices are predicted to increase by 1.3 percent in 2025, with a prediction interval from a decrease of 22.1 percent to an increase of 32.4 percent.
Farm-level fruit prices increased by 5.0 percent in December and were 17.3 percent higher than in December 2023. Farm-level vegetable prices, despite a 14.7 percent decrease in December 2024, were still 21.3 percent higher than December 2023. While prices in these categories slightly decreased in 2024 due to lower input costs and increased production, they are expected to rise in 2025 because extreme weather in some growing regions during the second half of 2024. Farm-level fruit prices are predicted to increase by 8.6 percent in 2025, with a prediction interval from a decrease of 4.3 percent to an increase of 23.8 percent. Farm-level vegetable prices are predicted to increase by 1.4 percent in 2025, with a prediction interval from a decrease of 20.8 percent to an increase of 31.8 percent.
Projected percentage changes in Producer Price Index for various farm-level and wholesale food categories in 2025.
For official USDA farm-level price forecasts, consult the World Agricultural Supply and Demand Estimates at a Glance report. Further detailed information and analyses of farm-level prices are available in USDA Economic Research Service Outlook publications, including reports on Livestock, Dairy, and Poultry, Oil Crops, Wheat, Fruit and Tree Nuts, and Vegetables and Pulses.
For access to Consumer Price Index and Producer Price Index datasets encompassing recent price changes and forecasts across all discussed categories, please visit the Overview page.
