The Cost of Groceries: Are Food Prices Going Up? - NerdWallet (2024)

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The Cost of Groceries: Are Food Prices Going Up? - NerdWallet? ›

Food prices rose 7.7% between April 2022 and April 2023, according to the most recent consumer price index (CPI) report from the Bureau of Labor Statistics. The CPI uses indexes to measure changes in average costs of items in a given period. There are specific indexes for these items, including food costs.

Food prices are expected to grow more slowly in 2023 than in 2022 but still at above historical-average rates. In 2023, all food prices are predicted to increase 6.2 percent, with a prediction interval of 4.9 to 7.5 percent.

Food inflation between 2021 and 2022 was multiples higher than its average over the past 20 years. Source: Congressional Research Service. According to the GAO, there were kinks all along the journey of food, from farm to plate.

According to a USDA report, an average family of four spent about $958 to $1,445 per month on groceries in January 2022. In January 2023 that same family is spending $1,047 to $1,576 on their groceries according to the USDA. That's $89 to $131 more for your average cost of groceries per month, which is an 9% jump.

The WFP predicts that by 2023 there will be a shortage of wheat and corn, which are two staple products in the food supply chain. The reports also estimate that these global food shortages will increase food prices and could even trigger a new global recession.

2023 looks to be ushering in another groceries shortage. Here's what you need to know. The pandemic led to shortages in everything from toilet paper to personal protection equipment — and it also introduced many food and produce shortages.

But, relief may be on the way. While 2022 retail food prices are at an all-time high, price increases are expected to grow more slowly in 2023, according to the USDA's findings on food price outlooks​.

Food prices are rising because of several factors, including inflation, labor costs, the supply chain and the war in Ukraine. Labor costs are still high, according to the U.S. Bureau of Labor Statistics. Food production costs are estimated to increase 4.1% in 2023, according to the U.S. Department of Agriculture.

Will everything be cheaper in 2023? ›

Key points. Inflation seems to be slowing, and some things could start to get cheaper in 2023. The cost of real estate, rental, cars, and gas could fall, at least a little. Don't get too excited about potential price drops, as there's still a lot of uncertainty about the economy.

The average food budget for a single person is between $250 and $300 a month, but that's just a guideline. If you can buy meals at a discount or visit family and eat with them, you might be able to spend less.

California Food Costs

In California, a single adult spends an average of $3,468 on food annually, and a family of four spends $10,016 on average.

Average Food Expenditures by Product

In the United States, the monthly cost of feeding one person is about $342.11. The average cost of food per day per person is $11.04.

Canned foods, pet food and beer may be in short supply due to a widespread aluminum shortage. Lettuce crops and orange groves were affected by plant viruses. One major producer of lettuce lost 80% of their crop in 2022.

Food inflation: Cost of groceries rising at a slower rate

It was a bad year for food shortages in 2022, with categories including eggs and baby formula hit hard. Unfortunately, 2023 could see its own batches of food shortages.

How to save money on groceries 2023? ›

“Dry pasta [production] had been flat for the past number of years, and it has significantly increased since the pandemic began,” said Carl Zuanelli, chairman of the National Pasta Association and CEO of Nuovo Pasta. “We really started to see panic buying toward the end of February, beginning of March.”

After peaking at 6.2% in 2022, we expect inflation to fall to 3.5% for 2023. Over 2024 to 2027, we expect inflation to average just 1.8%—below the Fed's 2% target.

In 2024. A September CNBC survey of analysts, economists and fund managers reveals that most believe that by 2024 inflation will have sunk close to the Fed's 2% target. If so, we'll enjoy lower prices for groceries, consumer goods and the general cost of living.

When will inflation slow down? Good news: It already has. “I feel like it's slowing down from May 2021 and 2022,” Gaertner said. “The target interest rate right now is probably at about 5%.

Every American should have at least a three-day supply of food and water stored in their home, with at least one gallon of water per person per day. If you have the space, experts recommend a week's supply of food and water. Choose foods that don't require refrigeration and are not high in salt.

That's due at least in part to rising wages and a shortage of labor. Those factors have also caused general spikes in the costs to transport goods, which have increased prices for food overall.

Inflation is so high because many consumers are spending more money than they usually do, and because supply chain issues and global fuel shortages have lingered since the pandemic. That high demand and low supply have led to an increase in prices.

Why are eggs so expensive? ›

Eggs are so expensive now because of a widespread outbreak of H5N1, a highly transmissible and fatal strain of avian influenza, or bird flu. This outbreak started in early 2022 and has grown into the largest bird flu outbreak in U.S. history. So the outbreak has lowered egg supply, while demand remains consistent.

Prices are currently coming down in some markets, and the national median price was ever-so-slightly lower in February 2023 than it was in 2022, but experts do not expect dramatic drops. In many areas where prices are falling, the declines have not significantly improved affordability.

In 2023, economic activity is projected to stagnate, with rising unemployment and falling inflation. Interest rates are projected to remain high initially and then gradually decrease in the next few years as inflation continues to slow.

Single adults: $59.20 – $92.40 per week, or $236.80 – $369.40 per month.

For a low-cost budget for a family of four, you can plan on spending $241.70 a week or about $1,047.10 a month. Moderate-cost plan. For a moderate budget for a family of four, you would spend $301.20 a week for groceries or $1,304.70 a month.

One of the most common types of percentage-based budgets is the 50/30/20 rule. The idea is to divide your income into three categories, spending 50% on needs, 30% on wants, and 20% on savings. Learn more about the 50/30/20 budget rule and if it's right for you.

Aldi is a Germany-based discount retailer with close to 2,000 store locations in 36 states. Aldi claims its prices are 50% less than traditional supermarkets. Independent research in markets like Houston and Chicago revealed that Aldi's prices are around 15% cheaper than Walmart.

Feeding Two Adults

Here are the USDA weekly grocery spending guidelines for households with one adult female and one adult male: Thrifty: $119.40. Low-cost: $122.90. Moderate-cost: $152.30.

Suggested grocery spending per month

You may find you spend more or less depending on your location or dietary preferences. These numbers offer a good starting point for a grocery budget: For a family of four in 2022, your spending on groceries should fall between $875 – $1,287 a month.

How to only spend $100 a month on groceries? ›

The average adult spends between $212 and $405 per month on groceries. This range encompasses all financial brackets and is indicative of a realistic monthly grocery budget. A single adult male spends between $264 on a thrifty plan and $405 on a more liberal plan.

How much do clothes cost per month? In the United States, households spend an average of about $120 per month on clothes. That comes out to $1,434 per year.

Average grocery bill for 1 person

If you're a single adult, depending on your age and sex (the USDA estimates are higher for men and lower for both women and men 71 and older), look to spend between $229 and $419 each month on groceries.

“A smaller household may find it better to shop weekly sales and to buy smaller amounts, to not only stay on budget but prevent food waste,” she said. “But if it's a larger household, it may pay to do bulk shopping less often, like on a monthly basis.”

Some categories are facing specific issues that could see very high food prices continue through 2023 — including eggs, largely due to the avian flu, and wheat and oils because of the Russo-Ukrainian War's impact on global exports, Volpe said.

The change may not look as dramatic – a pound of white bread went from $1.55 to $1.89 between the start of 2022 and the start of 2023 – but that's still a 22% price increase in just one year.

For example, prices for grains and bakery products increased by about 13%, while fruits and vegetables increased by about 9%. Similarly, dairy products increased by about 12%, but meats, poultry and fish increased about 10%.

Food prices in California will probably keep going up in 2023, but not as quickly as they have this year. Gasoline prices are headed down, at least for now. Interest rates are poised to keep climbing and the job outlook in the state is murky.

Will food prices go back down? ›

While 2022 retail food prices are at an all-time high, price increases are expected to grow more slowly in 2023, according to the USDA's findings on food price outlooks​.

The average price of a dozen eggs in the U.S. was about $4.21 in February 2023, according to the United States Bureau of Labor Statistics. March data has not yet been released. That's more than double the price in February 2022 of about $2.00.

May 2023 Highlights: U.S. simple average prices are: $4.34 per gallon for conventional whole milk, $4.29 per gallon for conventional reduced fat 2% milk, $4.82 per half gallon organic whole milk, and $4.82 per half gallon organic reduced fat 2% milk.

Droughts and wildfires in the western U.S. led to lower-than-average crop yields from farms in that region, driving up consumer costs for food, according to NPR. Supply chain issues that have continued since the pandemic have affected food supply.

Economists agree that supply chain issues are a major driver of the price hikes we've been seeing. In the food industry especially, transportation disruptions due to the pandemic and higher grain prices have made a significant impact.

Inflation doesn't end, it just gets less bad. And, in fact, we don't want it to end entirely.

Inflation might be easing, but the Fed's job remains tough. For many Americans enduring higher prices, easing inflation was on the wishlist for 2023. But based on the most recent data, inflation is still holding strong — though there are signs a cool-off could be coming.

But ingredient prices have actually been on a downswing for months, and individuals are still paying more for food. In part, it's because food producers have other expenses that remain pricey, like labor and transportation, compared to a few years ago.