The all-items Consumer Price Index (CPI) from the USDA Economic Research Service, a measure of economy-wide inflation, was down 0.1 percent from October to November 2019 and is 2.1 percent above the November 2018 level. The CPI for all food was down 0.1 percent between October and November 2019, and food prices were 2.0 percent higher than the November 2018 level. The degree of food price inflation varies depending on whether the food was purchased for consumption away from home or at home.
- The food-away-from-home (restaurant purchases) CPI increased 0.2 percent in November and is 3.2 percent higher than November 2018; and
- The food-at-home (grocery store or supermarket food items) CPI decreased 0.3 percent from October to November and is 1.0 percent higher than last November.
Beef and veal, other meats, fish and seafood, dairy products, processed fruits and vegetables, cereals and bakery products, and other foods are all expected to increase but at rates lower than their 20-year historical averages. Dairy product prices were up 0.4 percent in November and have increased 2.6 percent since November of 2018. Dairy product prices in 2019 are expected to increase in a range between 0.75 and 1.75 percent.
The 2020 CPI forecast indicates a continuation of low inflation at grocery stores and supermarkets. In 2020, food-at-home prices are expected to increase in a range between 0.5 and 1.5 percent, as potentially the fifth year in a row with deflating or lower-than-average inflating retail food prices. Pork, dairy products, fresh fruits, and cereal and bakery products are expected to increase in a price range near the 20-year historical average in 2020.
The Producer Price Index (PPI) is similar to the CPI in that it measures price changes over time. However, instead of measuring changes in retail prices, the PPI measures the average change in prices paid to domestic producers for their output. The farm-level milk PPI increased 1.7 percent from October to November and is up 6.7 percent since November 2018. The forecast has been trimmed in slightly this month with the 2019 farm-level milk PPI expected to increase in a range between 8.5 and 11.5 percent. The December WASDE showed the 2020 forecast of both Class III and Class IV raised on gains in most product prices with the exception of butter. The 2019 all milk price forecast is unchanged at $18.60 per cwt; the 2020 all milk price is raised to $19.40 per cwt.