Grocery prices to go even higher: How much USDA predicts

If you think paying $10 for a pound of bacon or $6 for a pound of butter is bad, it's about to get more expensive.

Pretty soon, you'll be paying even more for just about everything when it comes to eating in or dining out, according to the U.S. Department of Agriculture.

"All food prices are now predicted to increase," the USDA's Food Prices Outlook for 2022 March report said.  

The increases are the highest in decades as grocery prices got more expensive and rose nearly 9% for the year.

The USDA's Economic Research Service updated its March report predicting a 4.5%-5% rise in food prices this year. Eating out will see the highest increase, 5.5%-6.5%, the report said.    

Grocery prices are expected to rise between 3% and 4% in the coming months. And that's on top of all the other increases consumers faced over the past several months. 

No food category, the USDA said, decreased in price in 2021. And now the USDA revised its forecast upward for all food categories, including meats, poultry, eggs, dairy products, fats and oils, and more. The only category that the USDA revised downward was fresh vegetables.

Beef and veal had the largest increase and fresh vegetables the smallest. Prices for wholesale beef are predicted to increase between 4% and 7%.

Contributing to the higher retail poultry and egg prices, the report said, is avian influenza. Prices for poultry are predicted to increase by 6% to 7% and 2.5%-3.5% for eggs. 

"An ongoing outbreak of highly pathogenic avian influenza could contribute to poultry and egg price increases through reduced supply or decrease prices through lowered international demand for U.S. poultry products or eggs," according to the report. 

Strong demand for dairy products is driving up retail prices. The USDA's outlook in 2022 for dairy predicts a 4% to 5% increase. 

Also putting pressure on food prices is Russia's invasion of Ukraine and increases in interest rates by the Federal Reserve. 

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"The impacts of the conflict in Ukraine and the recent increases in interest rates by the Federal Reserve are expected to put upward and downward pressures on food prices, respectively. The situations will be closely monitored to assess the net impacts of these concurrent events on food prices as they unfold," the report said.

Consumers in metro Detroit and across the country have been hammered by inflation in recent months. 

Inflation came in at 7.9% for the last 12 months — the highest year-over-year increase since April 1981, according to February's U.S. Consumer Price Index, released in March. 

Contact Detroit Free Press food writer Susan Selasky and send food and restaurant news to:  sselasky@freepress.com. Follow @SusanMariecooks on Twitter.

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