USDA has sharply lowered its forecast for food inflation this year as price declines for dairy products and pork are expected to help offset sharply higher prices for beef and eggs.
The department's Economic Research Service Tuesday estimated that the cost of food eaten at home will rise 2.7% this year, just above the historical average rate of inflation over the past 20 years of 2.6%. In February ERS had forecast grocery prices would rise by 3.3% this year.
ERS raised forecast increases for egg prices to 57.6%, up from the February estimate of 41.1%. Beef prices are expected to increase 5.2% this year, compared to the previous estimate of 3.2%.
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But the cost of dairy products is expected to decline by 0.8% in 2025. The February forecast was for an increase of 2.2% this year. Pork prices, meanwhile, are expected to drop 1.5% this year; the February forecast projected they would increase 1.2%.
Prices for fruits and vegetables are expected to be flat this year. Last month ERS projected they would increase 1.7%.
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