Shopping for groceries should inflict less pain on Americans’ pocketbooks in the year ahead.
People should get some relief from food inflation in 2024, as the costs of basics like sugar, coffee, corn and soybeans are poised to ease after three years of surging higher, Rabobank said Wednesday in a report. Increased supplies will help put the brakes on escalating costs even as consumer demand remains tepid, with and interest rates, the bank said.
Not all food staple costs are expected to ease, with weather and possible restrictions on Russian exports likely to keep wheat prices elevated, Rabobank analysts said.
“The main beneficiaries of a downward trend in agri commodities should be baking, dairy and animal protein producers, who can expect lower prices for grain-and-oilseed-heavy ingredients,” they state.
Food commodity prices are ebbing after being stirred up by the pandemic, extreme weather and Russia’s invasion of Ukraine, with a United Nations measure of global prices down nearly 11% in September from a year earlier. But those lower costs aren’t yet being felt in any meaningful way at grocery stores, where higher energy and labor expenses are also part of the equation.
And while food prices have been rising at a steady clip since 2020, the most recent numbers from the government suggest the cost of filling up grocery carts is easing. Food prices were up 2.4%% in October from a year ago, only slightly north of the Federal Reserve’s 2% inflation target.
Consumers aren’t out of the woods just yet, however. Prices for beef, veal and frozen vegetables were all up at least 10% in October from 12 months earlier, but the price of eggs fell nearly 24%% during the same period. Other food products that cost less than a year ago include bacon, sausage, ham and lunch meats.
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