Grocery prices rose just 0.1% in December for the second month in a row and are up 1.3% year over year as food inflation continues to moderate, according to the latest Consumer Price Index.
Price increases for beef, pork, chicken, eggs and dairy products were offset last month by price declines for cereal and bakery products as well as fruits and vegetables, the Bureau of Labor Statistics reported Thursday.
The overall CPI rose 0.3% in December, led again by continued increases in housing costs and a rise in gasoline prices.
USDA’s Economic Research Service is forecasting that supermarket prices will actually fall 0.6% this year.
Pork prices rose 0.3% in December, driven by a 2.6% increase in the cost of ham. Beef prices ticked up 0.2%, while chicken cost 0.1% more last month.
Egg prices were up 8.9% in December, although they are nearly 24% below their level a year ago when the industry was still struggling with the impact of an avian influenza outbreak.
Dairy prices were 0.3% higher in December, led by a 0.5% rise in the cost of fluid milk.
Fruit and vegetable prices eased by 0.1% as lower prices for lettuce (down 4%) and potatoes (down 2.8%) offset increases for fresh fruit.
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Andy Harig, vice president for tax, trade, sustainability and policy development for FMI-The Food Industry Association, which represents grocery chains, said in a statement that the latest CPI “brings welcome news for Americans looking for an easing of inflation amidst recent economic challenges.
"Notably, the inflation rate for food-at-home has slowed to just 1.3% year-over-year (a drop of 0.4% since November), remarkable progress from just a year ago and signifying a positive trend towards market stabilization in the new year.”
Consumers continue to see significant price increases each month when they eat out. The cost of food eaten away from home rose 0.3% in December and is up 5.2% over the past year.
Michael Swanson, chief ag economist at Wells Fargo’s Agri-Food Institute, said on a North American Agricultural Journalists’ webinar this week that while supermarket prices will trend toward being flat or slightly negative during the year, the cost of eating away from home will stay relatively high.
"It's gonna be interesting to see who wants to eat where" this year, he said. "We've seen record spending on food away from home."
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