Grocery store food prices are forecast to rise between 1.5 and 2.5 percent in 2016, exceeding the 2015 increase of 1.2 percent, with some variation across food categories. Egg prices are expected to fall between 0.5 and 1.5 percent as the egg industry recovers from the highly pathogenic avian influenza (HPAI) outbreak, which reduced the supply of eggs in the U.S. market and drove retail egg prices up by 17.8 percent in 2015.
Retail beef and veal prices will also likely decline in 2016, dropping up to 1 percent below 2015 levels. Like eggs, beef, and veal prices experienced higher than average inflation in 2015, but as producers expand their herds, more cattle will be ready for market in 2016.
On the other hand, prices for pork and dairy products, which experienced deflation in 2015, are expected to increase up to 1 percent, and 2 to 3 percent, respectively. As the drought continues throughout much of California, ERS forecasts prices for fresh fruits and vegetables to rise between 2.5 and 3.5 percent.
Source:usda.gov