Groceries will get even more expensive this year, feds say. What could surge the most?

Your wallet might be stretched even thinner than usual at the grocery store by the end of this year, according to the U.S. Department of Agriculture.

According to the agency’s Food Price Outlook, released on March 25, the cost of groceries — or “food at home” — is expected to increase by up to 4% by the end of the year.

“At 4% over, that is going to be felt,” Connel Fullenkamp, an economist with Duke University, told The National Desk. “It’s going to be a big number and it’s going to take away from other expenditures or tighten your budgets even more.”

Food in other categories are also expected to cost more this year. The cost of restaurant food, or “food away from home,” is expected to increase between 5.5% and 6.5%, and the cost of all food is expected to go up at least 4.5%, the USDA found.

The agency attributes part of the changes in prices to the ongoing conflict in Ukraine — and the resulting fuel price hikes — and by recent increases in interest rates set by the Federal Reserve.

The extra costs will be felt more strongly in some products more than others. For example, poultry prices are expected to increase by up to 7%, influenced by historically low poultry stocks and by the spread of bird flu. Meanwhile the price of fresh vegetables could remain relatively steady, only increasing by 1% or 2%, the report said.

The findings come amid growing concerns among Americans about inflation. About one in five people said inflation is the biggest issue the country currently faces, according to a March 29 Gallup poll.

That concern came after inflation hit a 40-year high in February, McClatchy News reported.

“Americans’ outlook for the economy is now about tied with the most negative it has been since the early days of the pandemic in April 2020,” Gallup said.

Kitchen staples from all across the grocery store will become more expensive, the USDA predicts. Some of the products expected to go up in price include:

• Fresh fruit, with a 5%-6% increase

• Sugar and sweets, with an increase of 3% to 4%

• Fats and oils, with a 6%-7% increase

• Processed fruits and vegetables, with a 4.5%-5.5% increase

• Cereal and bakery products, with a 3%-4% increase

• Non-alcoholic beverages, with a 3.5%-4.5% increase

The findings also come a few weeks after the International Monetary Fund warned that Russia’s attacks on Ukraine will have a “severe impact” on the global economy.

In a March 5 statement, the international lender said the costs of energy and commodities like grain and wheat have already increased in price, adding to existing pressures the world faces in its attempts to rebound from the challenges caused by the COVID-19 pandemic.

And, according to the Associated Press, an inflation gauge closely monitored by the Federal Reserve surged by 6.4% in February, marking the highest year-over-year increase since January 1982 and having a ripple effect on the costs of food, gasoline and other expenses.

“I think [Americans] are getting tired of it, particularly because they know now, firsthand, what kind of bad news this really is because once a lot of these food prices go up, they just never go back down,” Fullenkamp told The National Desk. “So it’s not just that we’re seeing the prices go up on a temporary basis.”

This story was originally published March 31, 2022 at 10:45 AM with the headline "Groceries will get even more expensive this year, feds say. What could surge the most?."