• Military Menu                       

• Introduction
• Systems
• Facilities
• Agencies
• Industry
• Operations
• Countries
• Hot Documents
• News
• Reports
• Policy
• Budget
• Congress
• Links

• WMD
• Intelligence
• Homeland Security
• Space

Food Prices

The Consumer Price Index (CPI) is the principal indicator of consumer price changes in the U.S. economy. The food-at-home CPI indicates changes in retail food prices and is closely followed by industry analysts, food market participants, and policymakers. The year 2016 marked the first time in nearly 50 years that grocery store (food-at-home) prices were lower than those in the previous year. In 2016, retail food prices decreased by 1.3 percent, as many food categories—beef and veal, pork, poultry, eggs, and dairy—experienced declining year-over-year prices.

The all-items Consumer Price Index (CPI), a measure of economy-wide inflation, increased 0.2 percent from August 2024 to September 2024 and was up 2.4 percent from September 2023. The CPI for all food increased 0.4 percent from August 2024 to September 2024, and food prices were 2.3 percent higher than in September 2023.

The U.S. Department of Agriculture (USDA) Economic Research Service found that in 2024, prices for all food were predicted to increase 2.3 percent, with a prediction interval of 2.1 to 2.6 percent. Food-at-home prices are predicted to increase 1.2 percent, with a prediction interval of 0.9 to 1.6 percent. Food-away-from-home prices are predicted to increase 4.1 percent, with a prediction interval of 3.9 to 4.3 percent. In 2025, food prices are expected to increase more slowly than the historical average rate of growth. In 2025, prices for all food are predicted to increase 2.4 percent, with a prediction interval of -1.7 to 6.7 percent. Food-at-home prices are predicted to increase 1.6 percent, with a prediction interval of -4.6 to 8.0 percent. Food-away-from-home prices are predicted to increase 3.4 percent, with a prediction interval of 1.1 to 5.6 percent.

American grocery prices have risen significantly in recent years, and there are several key factors driving these increases. These factors combined create a cycle that can be hard to break, especially when multiple influences push prices higher across many types of food at once.

Ongoing supply chain issues, partly stemming from the COVID-19 pandemic, continue to disrupt the smooth transportation of goods. Labor shortages, port congestion, and transportation delays can increase the costs of getting products to shelves, which in turn affects prices. While the U.S. food system has been largely able to maintain operations and provide consumers with the variety of foods they desire since the Coronavirus (COVID-19) pandemic began, U.S. households faced sharply higher food prices for many staple items, especially meat in 2020. Prices for every major food-at-home category except fresh fruits increased in 2020. The most significant food price increases of 2020 occurred in the spring, as the first wave of coronavirus cases occurred in the United States.

Inflation has affected nearly every aspect of the economy, reducing the purchasing power of the dollar. This broad-based inflation has impacted grocery prices as well, as costs rise across the board. Demand for items like meat, dairy, and eggs has remained high, which can keep prices elevated, especially when combined with supply constraints in animal feed or production. Rising fuel prices drive up the costs of transporting goods, as grocery stores rely on regular deliveries. Transportation expenses are often passed along to consumers in the form of higher prices. Labor shortages have pushed wages higher in many industries, including agriculture, food processing, and retail. As businesses pay more for labor, they often increase prices to cover these costs.

International tensions and conflicts, particularly affecting major grain exporters, can disrupt global food supplies. This affects prices of staples like grains and oils. The ongoing conflict in Ukraine has significantly influenced global food prices, including those in the United States.

Ukraine, often referred to as the "breadbasket of Europe," is a major exporter of wheat, corn, and sunflower oil. The war has disrupted these exports, leading to reduced global supply and increased prices for these commodities. This shortage has affected the cost of related products, such as bread and cooking oils, in U.S. grocery stores. Both Russia and Ukraine are significant producers of fertilizers. The conflict has led to supply constraints, resulting in higher fertilizer prices. This increase raises production costs for farmers worldwide, including those in the U.S., leading to higher prices for various agricultural products.

The war has contributed to volatility in global energy markets, causing spikes in fuel prices. Higher fuel costs increase transportation expenses for goods, including food products, which are often passed on to consumers in the form of higher grocery prices. The conflict has exacerbated global food security issues, leading to increased demand and competition for available food supplies. This heightened demand can drive up prices for various food items, affecting grocery costs in the US.

In summary, the war in Ukraine has disrupted key agricultural exports, constrained fertilizer supplies, increased energy costs, and heightened global food security concerns. These factors collectively contribute to the rising grocery prices observed in the United States.

Droughts, hurricanes, and other climate-related issues can lead to crop failures or reduced yields, especially for products like wheat, corn, and certain vegetables. Reduced supply drives up prices. The climate crisis is having a significant impact on American food prices. Extreme weather events, shifting temperatures, and unpredictable weather patterns are all contributing to the rising cost of groceries in various ways.

Severe droughts, particularly in the western U.S., are affecting major agricultural states like California, which grows a large portion of the country’s fruits, vegetables, and nuts. Water scarcity raises the costs of irrigation and impacts crop yields, resulting in higher prices for these products. Intense heat waves, which are becoming more frequent due to climate change, can reduce crop yields or cause crop failure altogether. Certain crops, like wheat, corn, and soybeans, are particularly vulnerable to extreme temperatures. Reduced yields lead to increased prices for these staples, impacting a wide range of food products.

Warmer temperatures allow pests and diseases to spread to new regions or thrive longer during the year, increasing the need for pest control and crop management. These added costs for farmers can lead to higher prices for consumers. Extreme weather and unsustainable agricultural practices are contributing to soil degradation, which reduces the productivity of farmland over time. This drives up the cost of food as farmers need more resources to maintain yields.

Climate-driven disasters such as hurricanes, wildfires, and floods can disrupt supply chains, destroy crops, and damage infrastructure. These events increase the cost of production, transportation, and distribution, and these costs are often passed on to consumers.

The increased risk of crop failures due to climate impacts has led to higher insurance premiums for farmers. These additional costs are factored into food prices, as farmers pass on some of the costs to retailers and consumers. Livestock are also affected by the climate crisis. Heat stress in animals can reduce productivity in terms of meat, milk, and egg output. Additionally, drought impacts the availability and price of feed, driving up meat and dairy costs for consumers.

Climate events can disrupt supply chains by damaging infrastructure, such as roads and bridges, and affecting the reliability of transportation. This disrupts the availability and price stability of food across regions, contributing to price hikes.

Together, these climate-related factors are making the cost of food production less predictable and increasingly expensive. As climate impacts intensify, so too will the pressure on food prices in the US.