Agronometrics Shorts: Food Inflation to Slow Down in 2024 – USDA

The USDA recently released its Food Price Outlook report. According to the findings of the report, food inflation is projected to decelerate to about 3% in 2024, about half the pace of 2023. According to the forecast, In 2024, food prices are expected to continue to decelerate but not decline. All food prices are predicted to increase 2.9% in 2024, with a prediction interval of -0.9% to 6.8%. Grocery food prices are predicted to increase by 1.6%, with a prediction interval of -4% to 7.8%. The inflationary trends that have characterized the United States economy since 2021 seem to be subsiding. Still, inflation remains above the Federal Reserve’s 2% target. In October, the 12-month percent change in the all-items consumer price index (CPI) fell to 3.2% following gains of 3.7% in August and September (the CPI inflation rate peaked at 9.1% in June 2022). Rabobank, in its annual outlook for 2024 posited that overall food price inflation will be dragged down by falling prices of key food staples as growers increase production in response to high prices. Demand, meanwhile, is set to decline as consumers struggle with the effects of high interest rates and inflation.  “For the most part, we expect to see lower agricultural commodity prices, which alleviate the food inflation facing consumers,” says Carlos Mera, head of agricultural commodities at Rabobank.

Prices By History in the US

Source: USDA Market News via Agronometrics.

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Written by Sarah Ilyas