Get ready to pay more for that omelet in 2018.
Escalating food prices are on the way, with eggs being just one of the staples in line for a price hike.
Overall, retail food prices are expected to rise an estimated 1 to 2 percent in the coming year. While fats, oils and processed fruits and vegetables could potentially decline in price, the cost of meats, eggs and dairy is expected to increase. That’s according to the summary findings of the Department of Agriculture Economic Research Service “Food Price Outlook” for 2017-2018.
Food prices were already 1.2 percent higher in September 2017 than they were in September 2016, according to the ERS’s Consumer Price Index for food, which measures economy-wide inflation.
[See: 20 Tips for Saving Money at the Grocery Store.]
Eggs lead the way. Fluctuations in seasonal demand make eggs among the most volatile retail food items as far as price. For much of 2017, a jump in overall supply has driven the cost of eggs down, with prices decreasing by as much as 9 percent compared with 2016. But the ERS expects that trend to shift dramatically in 2018, with retail egg prices projected to increase 5 to 6 percent. In fact, the shift may have already begun, as the price of eggs increased 2.8 percent from August to September 2017.
Fruit not far behind. Already the cost of fresh fruit was up 1.7 percent year over year in September. (Despite falling prices for bananas and apples, other fresh fruit prices rose 6.1 percent, and citrus prices increased 1.4 percent since August.) And little relief is expected in 2018. According to ERS, the cost of fresh fruit is projected to increase between 3 and 4 percent next year. The story is similar for cereal and bakery products, with costs expected to increase 3 and 4 percent in 2018.
Got milk? You’ll be paying more for milk as well. Driven by increasing demand for dairy exports, which places upward pressure on domestic pricing, the cost of retail dairy products is projected to rise 1.5 to 2.5 percent in 2018, according to the ERS. In other words, that breakfast of eggs, cereal and fresh fruit is about to get measurably more costly.
[See: 10 Money Leaks to Shut Down Now.]
Assessing the impact. According to the USDA, a family of four (with children ages 6 to 11) that spends moderately on food averages $1,053.70 in monthly food costs. That number rises to $1,282.10 per month for a family of four that spends liberally on food. Were prices to rise 2 percent next year, the aforementioned families would spend roughly $253 and $308 more on food, respectively, over the course of the year.
Some silver linings:
Modest gains for meat. Although the increases aren’t expected to be quite as significant as those in the egg, fruit, cereal and dairy markets, ERS is also projecting upward pressure on the price of beef and pork next year. Beef and veal prices, which have been flat or decreasing for much of 2017, thanks to the largest recorded cattle herd in nearly a decade, are expected to rise in 2018 by up to 2 percent. Pork prices, driven by increasing demand for bacon cuts, are expected to follow suit, with the ERS projecting 2018 price increases of up to 1.75 percent. For those who eschew red meat, the picture is a little better, with poultry prices only expected to rise between 0.25 and 1.25 percent next year.
Vegetables hold the line. Vegetables are one of the few bright spots in the current ERS projections, with prices for fresh vegetables expected to rise by no more than 0.5 percent in 2018, and potentially even decline by 0.5 percent. If you like cooking your food in oil or butter, there’s good news there as well, as the ERS anticipates the price of fats and oils will decrease between 1.5 and 2.5 percent next year.
[Read: How to Feed Your Teen Without Destroying Your Food Budget.]
Mitigating factors. According the ERS, a number of mitigating factors could change the aforementioned forecasts in either direction. Among the most prevalent of those factors is weather, as a continuance of the severe and unexpected weather events that have plagued the nation in recent months has the potential to hamper agricultural production and push food prices higher in both the short and long term.
The strength of the U.S. dollar plays a key role as well. When the U.S. dollar is strong, as it has been throughout 2017, the sale of domestic foods in overseas markets becomes more difficult, in turn increasing supply and putting downward pressure on prices locally. A weakening of the dollar triggered by a weakening of the broader U.S. market in 2018, however, could have the opposite effect on prices.
How to keep rising food costs in check:
Though there may be little you can do about the increasing cost of certain foods, there are steps you can take to keep the amount you personally spend on food from rising too dramatically. Here are three of the simplest.
— Dine in. As is true whether food prices are increasing or decreasing, dining in will cost you far less than dining out. While food prices overall were 1.2 percent higher in September 2017 than in September 2016, the CPI for restaurant-bought food was up 2.4 percent year-over-year, compared to just 0.4 percent for food bought at grocery stores. With restaurants, you’re not only footing the bill for rising food costs, but for rising labor and rental costs as well. Dine in and save big.
— Buy in bulk and freeze. The projected 2018 cost increases won’t happen all at once on Jan. 1. Rather, they’ll happen gradually over the course of the year. Stocking up early on foods that can be kept frozen, such as beef, poultry and frozen fruit, can help you save.
— Load up on vegetables. Chances are you’ve always wanted to get more vegetables into your diet anyway. So, what better time to do that than 2018? With the price of vegetables likely to remain flat or even decrease over the course of the year, eating more vegetables can now help keep both you and your wallet in excellent health.
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These Foods Will Be More Expensive in 2018 originally appeared on usnews.com
