US: USDA cuts overall food inflation forecast, but egg prices rise

The USDA now expects food prices to rise 3.2% in 2025, slightly below its February forecast of 3.4%. Grocery prices (eating at home) are projected to rise 2.7%, up from the previous estimate of 3.3%. In contrast, restaurant prices (eating away from home) are expected to rise 3.7%, up from the February forecast of 3.4%. In 2024 , all food prices are projected to rise 2.3%, with grocery prices rising 1.2% and restaurant prices rising 4.1%.

Egg prices have jumped sharply amid the bird flu outbreak. The most dramatic change has come in the egg forecast, with the USDA now forecasting a record 57.6% increase in 2025 — up sharply from the 41.1% forecast in February and well above the 8.5% increase seen in 2024. Retail egg prices rose 12.5% ​​in February 2025 alone, following double-digit gains in January and December. USDA attributes the price volatility to the outbreak of highly pathogenic avian influenza (HPAI) that affected about 30 million commercial laying hens in early 2025. Although detections declined in March, USDA notes that retail prices tend to lag wholesale price changes, which have recently declined.

Mixed changes in other food categories. Several food categories are now projected to be cheaper in 2025 than in 2024:

Pork: down 1.5% (vs. +1.2% in February)

Other types of meat: decrease by 0.2% (versus +0.6%)

Poultry: down 0.4% (vs. unchanged)

Dairy products: down 0.8% (vs. +2.2%)

However, beef and veal prices are now forecast to rise 5.2% in 2025, up from a 3.2% increase forecast in February. Beef and veal prices are now forecast to rise 5.2% in 2025, up from a 3.2% increase forecast in February.

The USDA also slightly lowered its forecast for other categories:

Fats and oils: +0.3% (versus +0.6% in February)

SUGAR and sweets: +5.1% (versus +6.4%)

Fruits and vegetables: still expected to grow by 1.7%, although fresh fruit is now forecast to grow by just 0.1% and fresh vegetables by 2.0%.

Why is overall food inflation remaining subdued? Although egg prices are rising, their limited weight in the index—just 1.4% of overall food prices—helps explain why the overall food inflation forecast has been revised downward. By contrast, eating at home accounts for 58.9% of the food component of the CPI, while restaurant spending accounts for 41.1%.

The USDA emphasizes that its projections reflect the average annual change in prices for 2025 compared to 2024, not monthly or annual inflation. Some of the projected increases for 2025 have already materialized in data for the beginning of the year.

Bottom line: Even with inflation slower than in recent years, the trend remains clear: U.S. consumers will still pay more for food in 2025 than they did in 2024.