Magazine article Amber Waves

Retail Food Price Inflation Has Slowed over Time

Magazine article Amber Waves

Retail Food Price Inflation Has Slowed over Time

Article excerpt

Grocery store food prices tend to be somewhat volatile year to year. For example, retail food prices rose 4.8 percent in 2011, but just 2.5 percent in 2012. The volatility of retail food prices largely stems from their strong ties to food-production inputs with wide annual price swings, namely farm commodities and energy. From 1999 to 2018, the largest annual increase in grocery store prices was in 2008 (6.4 percent) when farm prices for grain, rice, and oilseeds soared.

However, in 2016, retail food prices actually fell 1.3 percent and fell again in 2017 (0.2 percent). Before 2016, the last time food prices had declined was 1967 (by 0.3 percent). Declining prices in 2016 and 2017 and slow price growth over the last two decades relative to earlier years have le?? many consumers, food industry experts, and farmers asking why. A recent ERS report investigates the underlying causes (with a particular emphasis on 2016 and 2017) and describes how multiple factors may have contributed to recent food price deflation.

Historically, grocery store prices have generally risen each year. Back-to-back years of food price deflation (in 2016 and 2017) have contributed to lower food price inflation over time. The 20-year moving average for grocery store prices, which is a measure of general long-term trends, has fallen from an average rise of 3.6 percent per year in 1999, to 3.1 percent in 2008, and to 2.0 percent in 2018.

Beginning in 2015, increased U. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.