USDA is expecting food prices to rise an additional three percent this year.
Andrew Harig with the Food Industry Association says the weekly cost of groceries since 2020 has gone up by about 40 percent for households.
“If you look at that, $120 to $170, that exceeds the rate of inflation over that period,” he says.
USDA’s February Price Report expects most of the cost increases to be seen on food-away-from-home purchases, up nearly four percent. Food-at-home costs for 2026 are projected to increase by 2.5 percent.
Harig says shifting consumer demographics have changed what’s in the overall food basket and how much they’re willing to pay for it.
“You have Gen. Z entered the marketplace, and now we have Gen. Alpha entering the marketplace, and they eat different than older generations,” he explains.
He says that’s meant more demand for snack foods, fresh produce, proteins, and energy drinks.
USDA’s outlook includes a nearly 7 percent price increase for sugar and sweets, a 5.5 percent rise in beef and veal prices, and more than a 5 percent increase in nonalcoholic beverage prices.
Most other food prices are expected to increase slightly, with the recovery from last year’s highly pathogenic avian influenza expected to drop egg prices by more than 27 percent.
Harig highlighted FIA consumer food research as part of the recent USDA Ag Outlook Forum.
