CPI for “Food at home” jumped in December and is up 30% since January 2020. The CPI for restaurant food is even hotter.
By Wolf Richter for WOLF STREET.
The CPI for “Food at home” – food that people buy at stores, markets, or online and consume off premise – jumped by 0.72% month-to-month (+9.0% annualized), the biggest jump since August 2022, after a slight decline in the prior month, according to the CPI data from the Bureau of Labor Statistics. This increase pushed the year-over-year increase to 2.4%.
Prices of many food and drink categories jumped in December, such as beef, coffee, dairy, and “other foods” which include items like sugar, sweets, fats and oils, salad dressing, peanut butter, soups, frozen and prepared meals, snacks, spices, olives, pickles, baby food and formula, etc. But prices of some foods fell, and fell hard, such as eggs whose avian-flu related price spikes have been imploding.
Since January 2020, the CPI for food at home has surged by 30%. The chart shows the price level. After the surge in 2021 through 2022, prices flattened out for a while, then rose slowly for a while. The spike in December was an outlier, and maybe just a blip. But the alternative could be that it’s an ominous sign of food inflation taking off again.
Beef prices spiked month-to-month by 1.0% (+12.7% annualized) in December and by 16.4% year-over-year.
Beef prices have been soaring for five years, as the US cattle herd has dropped to a 64-year low for a laundry list of reasons, causing tight supply. Despite the high prices, demand for beef has not yet collapsed. Americans gripe, moan, groan, wail, and gnash their teeth about high beef prices, but keep buying it and keep paying those prices. Prices would come down if demand collapses. But that hasn’t happened yet.
The BLS tracks tens of thousands of products and services by detailed items separately, which are then combined in categories and indices.
For example, the BLS tracks the price of ground beef, 100% beef, excluding round, chuck, and sirloin, and excluding pre-formatted patties. The average price of this type of ground beef spiked by 2.2% (+30.6% annualized) in December from November, and by 19.3% year-over-year, to $6.69 per pound, according to the CPI data from the BLS.
The average price of this type of ground beef has exploded by 72% since the beginning of 2020.
Chicken breast, boneless – one of the tens of thousands of items that the BLS tracks – was unchanged in December, with an average price of $4.15 per pound, up by 1.2% year-over-year.
During the inflation shock from 2020 through September 2022, the price of this item had exploded by 58%, then skittered lower. But it is still up by 36% from early 2020, and very high.
The price spike of eggs is imploding, but prices are still higher than they had been before the two avian flu episodes.
The avian flu came in two waves, the first in 2022 and the second in 2024, each triggering shortages of eggs, empty shelves, purchase restrictions when eggs were available, and huge price spikes.
The average price of “Grade A Large Eggs” had soared by 368% from $1.33 per dozen in mid-2020 to $6.23 at the peak of the second wave in March 2025, according to CPI data by the BLS. Then, prices began to collapse.
In December, the average price of Grade A Large Eggs fell another 5.2% from November, to $2.71 per dozen. They have now plunged by 53% from the March peak, but are still 86% more expensive than they had been in mid-2020.
Dairy and related products contributed to the inflation shock in 2020 to 2022, when they spiked by 22%. Since then, prices have wobbled along at these high levels.
The CPI for dairy and related products spiked by 0.9% in December from November, after falling in prior months from the all-time high in August.
“Other foods,” is a CPI category that combines the indices of many specific food items that the BLS tracks separately. They include the categories for sugar, sweets, fats and oils, salad dressing, peanut butter, soups, frozen and prepared meals, snacks, spices, olives, pickles, baby food and formula, etc. So a substantial part of the grocery store. “Other foods” were a massive culprit in the inflation spike in December.
The CPI for “other foods” spiked by 1.6% in December from November (+21% annualized), after being relatively unchanged for seven months.
Year-over-year, they rose by 2.7%, the biggest year-over-year increase in two years. Since January 2020, prices for other foods soared by 31%.
Fresh fruit and vegetables also surged during the era of the inflation shock. Since then, prices have wobbled higher, but more slowly, and are 19% higher than in January 2020.
In December, the CPI for fresh fruits and vegetables rose by 0.5% and was up a hair from a year ago:
The CPI for roasted coffee – includes the indices for roasted whole bean, ground, and instant coffee – spiked by 1.9% in December from November (+26% annualized).
Coffee started rocketing higher in mid-2021. By February 2023, it had spiked by 23%. Then it tapered off a little.
In September 2024, it began spiking again and since then has spiked by another 25%.
These two surges roughly follow with some lag the two surges of global commodity prices of green coffee beans, plus some extra profit for US retailers and their coffee supply chains.
Since January 2020, the CPI for coffee spiked by 52%.
Various types of green coffee beans are traded as a global commodity product, and prices can be very volatile, often driven by fears of droughts, bad harvests, market forces, tariffs, and fears of tariffs.
For example, futures prices for green beans of Arabica coffee are currently at $3.58 per pound (chart below via Trading Economics):
- From mid-2020 to early 2022: +150%
- Then skittered down some.
- From late 2023 to February 2025: +125%
- February 2025 was the peak. Since then, futures prices have zigzagged violently up and down and are currently down 14% from the February peak.
Food commodity prices can make crazy moves. But those moves don’t get passed on to retail prices in all their craziness for several reasons, including:
One, retailers and their supply chains work off long-term contracts.
And two, the cost of green coffee beans as a commodity is only a small-ish part of the retail price. The current green-bean cost of $3.58 per pound is close to one third of the $9.05 average price in the CPI for “Coffee, 100%, ground roast.” The difference goes to the roaster, the retailer, the transportation companies, and everything in between, plus profits galore for all of them.
Rising food prices (inflation), and even continued sky-high food prices that are no longer rising (high prices) cause a lot of hardship among consumers who aren’t rich and who have to make all kinds of trade-offs to put this food on the table. Food prices are critical, consumers face them every day, and yet politicians, central bankers, and billionaires can be tone-deaf on the subject.
Inflation at restaurants – the CPI for “Food away from home” which is separate from the above CPI for “Food at home” – jumped by 0.7% in December from November.
Year-over-year, it rose by 4.1%, the biggest year-over-year increase since July 2024.
Since January 2020, the CPI for Food away from home has surged by 35%.
For restaurants, the biggest cost component is labor, not the cost of the ingredients. As the cost of labor rises, restaurants need to figure out how to pass that on to their menu prices. In addition, restaurants have to deal with rents, insurance, electricity, gas, supplies, equipment, repair and maintenance of the equipment, and all kinds of other costs.
And in case you missed it: Bad-Joke Housing CPIs, Absurd Health Insurance CPI Still Mar Today’s CPI Report, Repress Year-over-Year CPI Inflation
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Beef prices up with zero retracement, why? “Beef prices remain high because the U.S. cattle herd is at a historic low, driven by years of drought and high input costs (feed, fuel, financing), which makes rebuilding herds expensive, while strong consumer demand continues, meaning it will take several years for supply to catch up, with experts predicting little relief until late 2027 or 2028. ” Ok I’ll be watching next year.
Could we import beef from Argentina, especially since we are on such good terms with their president, and we are extending a bailout for their economy?
I just bought a bottle of Malbec from Costco for 6.99 just to try it out, and to my disbelief it was better than some of the expensive French wines.
The funny thing is the US is still a big exporter of beef.
Once you travel the world. You really notice how affordable the food at the markets are We feel something is broken in the states with how expensive the food is. Apples for example taste better and are way more affordable in Europe like half price with a weaker USD.. I just bought chicken to grill in New Zealand for 4 people and it cost 9 New Zealand dollars that 5 USD, my wife tells me that would have cost 12 usd or more in the states. Eating out almost anywhere but the states is way more affordable because no taxes and no tipping on the restaurant tab. Food prices in the USA is just wrong.
Don’t you have to compare NZ prices with respect to NZ income and not US wages unless you happened to have retired there with US pension?
True that, Tucker Carson ran a show about how cheap it was in Russia to buy groceries but neglected how little income people made. But my point about no taxes and no tipping is huge, in my hometown in the states the sales tax at a restaurant is 9.5% and 20% for tipping that adds up!!. But the more I travel the more I believe food prices are broken in the states, it’s interesting that Porches all over the world sell for a premium than the USA post conversions. States are great for buying a Luxury car or luxury goods but poor for buying dinner out., Swiss prices at restaurant are expensive but they have a high minimum wage for the staff and free health insurance included. Most restaurant staff in the USA get zero health insurance with their job. Imagine how expensive a meal out would be if they were provided health insurance, it’s broken in my opinion.
Regarding coffee, there’s also some substitution at work that makes consumer prices less volatile. For cheaper brands especially, if Arabica (KC Futures) get too expensive, the blend in the package you see in the supermarket gets weighted more towards cheaper Robusta (KD Futures). Some people might notice the difference if it goes from 60-40 to 40-60, but I certainly wouldn’t. With other brands, they might keep it 100% Arabica all the time, so prices would be more volatile.