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The US Department of Agriculture (USDA) has released its 2025 Food Price Outlook, forecasting trends that will shape grocery store receipts and restaurant bills in the months ahead.
What’s Ahead for Food Prices?
According to the USDA, overall food prices are expected to rise by 2.2 percent in 2025. While this is comparable to 2024’s rate, it remains slower than the historical average. However, variations in price changes across different food categories could impact consumer spending habits.
Grocery Store vs. Dining Out
For those who cook at home, food-at-home prices (grocery store and supermarket purchases) are predicted to increase by 1.3 percent. However, the prediction interval ranges from a 2.7 percent decrease to a 5.5 percent increase, meaning some items may become cheaper while others continue to climb.
Dining out will likely become more expensive. The food-away-from-home index (restaurant purchases) is projected to rise by 3.6 percent, with a range between 2.0 and 5.1 percent. This reflects increasing labor and operational costs in the restaurant industry, which are often passed down to consumers.
Which Foods Will See the Biggest Price Swings?
Eggs: Prices for eggs remain highly volatile due to ongoing avian influenza outbreaks. The USDA expects egg prices to increase by 20.3 percent in 2025, though uncertainty remains high, with a prediction range from 0.1 to 45.3 percent.
Beef and Veal: After increasing 4.9 percent year-over-year in December 2024, beef and veal prices are expected to rise by 1.5 percent in 2025. However, tight supplies and higher production costs could push this number higher.
Pork: Unlike beef, pork prices are predicted to decline slightly, decreasing 0.8 percent in 2025. This follows a 1.3 percent drop in December 2024, driven by seasonal trends.
Dairy Products: After a modest 0.2 percent increase in December 2024, dairy prices are forecasted to rise by 1.3 percent in 2025 due to lower milk production.
Fresh Fruits: Prices fell 2.1 percent in December 2024, and the USDA predicts only a 0.7 percent increase in 2025, meaning fruit prices could remain relatively stable.
What’s Driving These Changes?
Several factors contribute to these projected shifts in food prices. The lingering effects of past supply chain disruptions, fluctuations in agricultural production, labor costs, and external factors such as disease outbreaks (like avian influenza) all play a role.
Additionally, while energy prices have declined, rising costs for certain commodities continue to shape the food market.
The USDA’s forecast suggests that while food inflation is slowing compared to past years, fluctuations in key categories mean shoppers should remain vigilant. Whether stocking up at the grocery store or dining out, consumers can expect a mixed bag in 2025’s food price trends.
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