Food CPI Still Rising

The all-items Consumer Price Index, a measure of economy-wide inflation, increased by 0.3% from November to December before seasonal adjustment, up 7.0% from December 2020, the USDA’s Economic Research Service said Thursday.

The CPI for all food increased 0.5% from November to December, and food prices were 6.3% higher than in December 2020.

The level of food price inflation varies depending on whether the food was purchased for consumption away from home or at home:

  • The food-away-from-home (restaurant purchases) CPI increased 0.6% in December and was 6.05 higher than December 2020; and
  • The food-at-home (grocery store or supermarket food purchases) CPI increased 0.4% from November to December and was 6.5% higher than December 2020.




In 2021, food-at-home prices increased 3.5% and food-away-from-home prices increased 4.5%.  The CPI for all food increased an average of 3.9% in 2021.

Of all the 2021 CPI food-at-home categories tracked by the ERS, the beef and veal category had the largest relative price increase at 9.3%, and the fresh vegetables category the smallest at 1.1%.  No food categories decreased in price compared with 2020.

Twenty-year averages for each food price category were revised this month.  The high food prices in 2021 led to increases in many of them.  The 20-year average only declined for dairy products and fresh vegetables.




Food price increases were expected to be from 20-year averages to the rapid increases observed during the pandemic.  In 2022, food-at-home prices were predicted to increase from 1.5% to 2.5%, and food-away-from-home prices were predicted to increase from 3.5% to 4.5%.

Price increases for food away from home were expected to exceed historical averages but be at or below the inflation rate in 2021.

Meat-price pushes were expected to ease in the latter half of 2022.  Price increases were expected to align more closely with 20-year averages for most other food groups.

Forecast ranges for beef and veal and pork were revised upward, as well as the aggregate categories of meats and meats, poultry and fish.

In December, prices for the largest meat categories decreased sharply.  Beef and veal prices decreased 2.3% and pork prices 2.1%.

The late-year decrease in average prices led to lower average 2021 prices, but prices for both food price categories were expected to increase in 2022.  Above-average exports in recent months indicated strong international demand for US beef.

While high pork prices were expected to decline in the latter half of 2022 as exports to China decline, high prices were expected to persist through the first half of the year from higher-than-average exports and low production.




The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $136.74 to $139.41 per cwt, compared with last week’s range of $137.18 to $141.00.  FOB dressed steers and heifers went for $213.43 to $218.04 per cwt, versus $212.87 to $216.93.

The USDA choice cutout Thursday was down $0.35 per cwt at $289.11, while select was off $0.62 at $279.10.  The choice/select spread widened to $10.01 from $9.74 with 112 loads of fabricated product and 24 loads of trimmings and grinds sold into the spot market.

The USDA reported that basis bids for corn from feeders in the Southern Plains were steady at $1.40 to $1.65 a bushel over the Mar futures and for southwest Kansas were unchanged at $0.35 over Mar, which settled at $6.25 1/4 a bushel, down $0.01 3/4.

The CME Feeder Cattle Index for the seven days ended Wednesday was $159.05 per cwt down $0.45.  This compares with Thursday’s Jan contract settlement of $158.92 per cwt, up $0.20 and Mar’s $159.50, down $1.30.