Will Food Prices Ever Go Down?

Home economics and food cost. Why you may be feeling pinched at the grocery store.

Seems like I stop at the grocery store for something every few days. I doubt my habit is that unusual. Even when grocery prices are higher, I’ll buy most items anyway…Eggs, peanut butter, coffee, apples, meat, broccoli, milk, ice cream…. And, that 2015 egg shortage causing the price for a dozen to triple?  I still bought eggs. Have you ever questioned the price of groceries? Check out my conversation about consumer economics and food cost with expert financial educator, author, successful entrepreneur and MOM!

Q: A lot of shoppers (me included) sometimes feel squeezed by the cost of groceries. Will food prices ever go down? 

A: Over the last two decades, we’ve seen our basket of groceries consistently creep up between 1 and 6% annually. That works out to be an average yearly uptick of 2.6%, based on data from the U.S. Department of Agriculture (USDA). Yeah, yeah…prices go up, never down.

But wait, 2016 was a different story!

USDA shows food-at-home costs actually declined overall last year, marking the first drop in grocery prices in 50 years. Those falling egg prices helped crack the trend—a 34% drop reflected the chicken supply recovering from that contagious virus. Thank goodness. The huge decline offset the 2.2% rise of fresh fruit prices.

Supply and demand. The more bountiful a certain food commodity, the less we generally pay for it.

Q: Am I  paying more for food overall?

A: Consider whether you are feeling the pinch of higher grocery bills for other reasons. For instance, your bill may be higher if you’re:

  • buying different items (perhaps new or premium products),
  • buying more (as your family’s caloric needs increase), or
  • buying more prepared food (to save time).

To see how you stack up, refer to the USDA baseline. Every month, USDA figures the cost of food purchased for home use based on a nutritious diet for four scenarios – thrifty, low-cost, moderate-cost and liberal budgets.

Take March 2017, for example: A thrifty family of four (two parents, 2 kids under 12) spent about $638/month, while the liberal plan was double that—$1273/month.

If you want to use the grocery budget calculator using your own family, click here.

Realize food choices impact these plans: For example, the thrifty meals may feature more pasta and low-cost protein sources, while a liberal plan may use pricier meat cuts or out-of-season veggies.

Q: Does this count eating out?

A:  No! That’s just for USDA’s food-used-at-home category. Many households spend an equal amount at restaurants, however, which eats up more and more of Americans’ food dollar. Spending on food-away-from-home saw an increase of 2.6% in 2016, according to USDA.

So if your favorite restaurants recently printed new menus—and changed prices—it’s not surprising. (I noticed an added surcharge of 20 cents/egg on my “Sunday breakfast special” over a year ago…but the omelet price increase didn’t disappear when egg prices went back down.)

While we might see temporary relief in some commodities, food in general is likely to cost us more in the future. Food prices are typically impacted by major weather events, livestock diseases, processing or transportation snafus, packaging changes, and inflation—there will always be another virus, drought, or global event causing a shortage in something. Also, food prices typically move in tandem with fuel prices, so take note when you’re paying more at the pump.

Guest Contibutor:



An entrepreneur, author, and financial blogger Joanne Kuster develops educational programs, products, and content in the areas of personal finance and consumer economics. Ask her questions at MoneyGodmotherBlog.com, @kidsmoney on Twitter, or Facebook.com/MoneyGodmother.

Home economics and food cost. Why you may be feeling pinched at the grocery store.
This post is part of a series called “Ask the Experts.” I love getting questions from readers! But sometimes a question needs a bit more from another expert. Rather than give you a bland, so-so answer, I’ve reached out to my respected (and very talented) colleagues to provide you with the best info. Thanks for your insightful, timely questions!

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