There is some good news regarding U.S. food inflation - the rate of food inflation has been steadily declining since August 2022. The chart below shows the annualized rate of food inflation from March 2023 to February 2024. The annualized rate for food inflation has steadily declined from 8.5% in May 2023 to 2.2% in February 2024. The 2.2% was the lowest rate for food inflation in almost three years, matching the rate in May 2021. The monthly change in food at home prices for February and March was 0.00%.
U.S. Food Inflation (Annualized) March 2023 – February 2024 (Sources: Bureau of Labor Statistics; Trading Economics)
The chart below shows food inflation for the 12-month period ended February 2024. On a comparative basis, U.S. food inflation was lower than other countries.
Food Inflation for 12 months Ended February 2024 (Source: Trading Economics) 12-Month Change In Food Prices
United States
2.2 3.3 3.3 5.0 5.1 8.1
Canada
Euro Area
United Kingdom
Mexico Russia
Food inflation is particularly hard on consumers. Putin’s invasion of Ukraine drove fertilizer and commodity prices to record levels, climate factors, the largest avian flu outbreak in history, supply chain issues, industry concentration, and labor shortages all contributed to record food inflation around the world. However, many of those factors have been mitigated, and food inflation, particularly in the United States, has declined significantly. In the future, what happens to food prices will be driven by global factors and domestic policies that affect the supply and production of food. If elected, Trump has indicated implementation of a new 10% minimum tariff on all imports which would negatively affect food prices. In addition, there is the ongoing saga of immigration. Immigrants have played an important part in food supply. Labor shortages would drive grocery prices even higher.
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Center for Business and Economic Insight
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