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Monthly Food Inflation Shows Mixed Recovery Patterns
Food prices across America painted a complex picture in July 2025, with costs rising steadily but at different paces than many economists predicted. According to the latest inflation data published August 12, 2025, by the U.S. Labor Department’s Bureau of Labor Statistics (BLS), the average price of food in the United States rose by 2.9% in the 12 months ending July, following an annual increase of 3% in June. This slight moderation masks the reality that American families continue to wrestle with price increases that strain household budgets. The numbers tell only part of the story—while inflation appears to be cooling, grocery bills remain stubbornly high compared to previous years.
What’s particularly striking is how these statistics translate into real shopping experiences. Food prices in June 2025 were 3.0 percent higher than in June 2024. The level of food price inflation varies depending on whether the food was purchased for consumption at home or away from home: The food-at-home (grocery store or supermarket food purchases) CPI increased 0.2 percent from May 2025 to June 2025 and was 2.4 percent higher than in June 2024. Meanwhile, dining out costs soared even faster.
Restaurant Prices Surge Past Grocery Store Inflation
If you’ve noticed your favorite restaurant meals costing significantly more, you’re not imagining things. The food-away-from-home (restaurant and other foodservice purchases) CPI increased 0.4 percent from May 2025 to June 2025 and was 3.8 percent higher than in June 2024. This disparity reveals a troubling trend – while grocery stores managed to moderate price increases, restaurants passed along higher costs directly to consumers. Labor shortages, increased wages, and rising ingredient costs hit the restaurant industry particularly hard. Many establishments struggled to balance keeping doors open with affordable menu prices.
The gap between home cooking and dining out costs widened dramatically throughout 2024 and into 2025. In contrast, prices for food away from home showed consistent growth across the past decade, rising by more than 7.0 percent in 2022 and 2023 and moderating to a 4.1-percent increase in 2024. Restaurant owners found themselves caught between spiraling operating costs and customer resistance to higher prices.
The Dramatic Three-Year Food Price Journey
To truly understand today’s food inflation crisis, you need to look at the remarkable journey prices have taken since early 2020. A variety of factors have contributed to a 31% jump in food prices since 2019, and now higher tariffs on imported food could bring new price hikes. No single factor can explain why food is so much more expensive now. Food prices—up 30.7% since 2019—remain high because of the combined impact of rising input costs, supply chain disruptions, and corporate profits. Disruptions across everything from farm labor to transportation networks created ripple effects that still persist today..
The worst of the inflation surge appeared to peak in 2022, when families experienced sticker shock unlike anything seen in decades. A series of shocks to the food supply chain between January 2020 and January 2023 resulted in inflation peaking near 10 percent in 2022. U.S. food price increases have since tapered off, growing by 5.8 percent in 2023 and 2.3 percent in 2024. However, even as the rate of increase slowed, the cumulative effect left many households struggling to afford the same groceries they’d purchased routinely just a few years earlier.
Egg Crisis Reaches Historic Heights
Perhaps no single food item captures the volatility of current food inflation better than eggs. The bird flu crisis is ravaging the nation’s egg supply and presents an immediate challenge for the Trump administration. An outbreak of avian influenza is growing and has affected nearly 13 million birds in the last 30 days, according to USDA data. The situation became so severe that some retailers implemented purchase limits while others struggled to keep shelves stocked at all.
The financial impact on consumers proved devastating. Then, the price of eggs more than doubled from the beginning of 2022 until hitting a peak of $4.82 per dozen in January 2023. A new price record was set in March 2025 at $6.23 per dozen. Restaurants across the country began charging surcharges for egg-containing dishes, while home cooks searched for substitutes. Egg prices are estimated to increase about 20% in 2025, compared to about 2.2% for food prices in general, according to the US Department of Agriculture’s price outlook. Egg prices were also up more than 36% year-over-year in December, according to the Consumer Price Index.
Government Response to Avian Flu Emergency
Recognizing the severity of the egg crisis, federal authorities launched an unprecedented response. U.S. Secretary of Agriculture Brooke Rollins today announced a $1 billion-dollar comprehensive strategy to curb highly pathogenic avian influenza (HPAI), protect the U.S. poultry industry, and lower egg prices. This is in addition to funding already being provided to indemnify growers for depopulated flocks. The massive investment demonstrated how seriously officials viewed the threat to America’s food security and household budgets.
Early results from the intervention showed promise. Since February 26, wholesale egg prices have dropped nearly 50%. The New York wholesale egg price, which peaked at $8.53 per dozen, has steadily declined to $4.08 as of March 19. Yet consumer prices at retail stores lagged behind wholesale improvements, leaving many families still paying premium prices for basic breakfast staples. The government’s strategy included expanded biosecurity measures, financial relief for farmers, and increased compensation for affected producers.
Global Food Price Index Shows Mixed Trends
American food inflation didn’t occur in isolation – global commodity markets experienced significant turbulence throughout 2024 and 2025. The FAO Food Price Index* (FFPI) averaged 130.1 points in July 2025, marking an increase of 2.1 points (1.6 percent) from June. Overall, the FFPI was 9.2 points (7.6 percent) higher than in July 2024, yet remained 30.1 points (18.8 percent) below its peak reached in March 2022. These international price movements influenced domestic food costs through trade relationships and commodity markets.
Different food categories experienced dramatically different price trajectories. Despite a 2.1 percent average annual decline, 2024 saw a volatile food commodity market, with sugar and cereals dropping, while vegetable oils, dairy and meats surged. Falling by over 13 percent each, cereals and sugar were the commodities that experienced the greatest declines in 2024. Meanwhile, Meanwhile, prices for vegetable oils, dairy, and meat increased by 10%, 5.8%, and 2.7% YoY, respectively, driven by factors such as tight global palm oil supply, geopolitical tensions, and disruptions in the supply chains of dairy products and meat.
Corporate Profits Amid Consumer Struggles
As families tightened budgets to accommodate higher food costs, questions arose about whether all price increases reflected genuine supply and demand pressures. Despite the headwinds described above, grocery stores’ profit margins increased in recent years, according to a March 2024 report by the Federal Trade Commission. The FTC report notes that food and beverage retailers saw their revenues outpace their costs by more than 6% in 2021. That was a new high for that particular profit measure until 2023, when it reached 7%. These findings sparked debates about whether some companies took advantage of inflationary expectations to increase margins beyond what supply chain costs justified.
The egg industry faced particular scrutiny over pricing practices. In fact, they made so much that the company is currently under investigation by the Department of Justice for alleged price fixing, resulting in a 4 percent drop in its stock. “Egg producers and grocery stores may leverage the current avian flu outbreak as an opportunity to further constrain supply or hike up egg prices to increase profits,” a group of Democratic lawmakers, including Sen. Elizabeth Warren, wrote in an open letter in January, according to the New York Times. The investigation highlighted concerns that genuine supply disruptions might provide cover for anticompetitive behavior.
Supply Chain Disruptions Continue
Beyond disease outbreaks and market manipulation concerns, fundamental supply chain problems continued plaguing food distribution throughout 2025. Refrigerated truck transportation is a major pain point in the food supply chain right now. There’s a shortage of drivers, long-haul truck rates are up and eggs are of course very transportation-intensive,” Volpe said. “Even before we were dealing with avian flu, the trucks just weren’t there to deliver eggs in a timely fashion. These logistics challenges affected far more than just eggs, creating bottlenecks that pushed up costs across multiple food categories.
The transportation crisis represented just one aspect of broader supply chain vulnerabilities exposed by recent years’ disruptions. Labor shortages in food processing facilities, extreme weather events affecting crop yields, and energy price volatility all contributed to an unstable food pricing environment. Many industry experts worried that these structural weaknesses made the food system more vulnerable to future shocks.
Consumer Behavior Shifts Under Pressure
Faced with persistently higher food costs, American consumers began making significant changes to their shopping and eating habits. In the year following 2022’s large price increases, consumers reduced their share of food-at-home spending on most animal-based protein products except for eggs. Per gram, these products typically are among the more expensive foods, so consumers may choose less expensive substitutes in response to price increases. Families switched to cheaper protein sources, bought generic brands more frequently, and cooked at home more often.
Restaurant owners noticed dramatic changes in customer behavior as dining out became less affordable for many households. Some establishments reported customers ordering fewer items per visit or choosing less expensive menu options. In contrast, consumers increased spending on cereals and bakery products and on the “other foods” category, which includes processed and prepared meals. This shift toward more processed, shelf-stable foods reflected both budget constraints and the convenience factor during economically stressful times.
Looking Ahead: Price Predictions for Late 2025
Economic forecasters painted a cautiously optimistic picture for food price trends in the remainder of 2025, though significant uncertainties remained. In 2025, the ERS Food Price Outlook forecasts show that food-at-home prices are expected to rise faster than in 2024 but slower than the 2005–24 average rate of growth (2.6 percent), while food-away-from-home prices are predicted to grow at rates above average (3.5 percent) but slightly slower than in 2024. These projections assumed no major new supply chain disruptions or disease outbreaks.
Consumer expectations for future price increases aligned closely with official forecasts. Looking twelve months ahead, consumers predict that food prices will be approximately 2.5% higher than in November 2024, matching the USDA Economic Research Service’s prediction for annual food price increases in 2025. However, Given these multiple sources of uncertainty, food price projections for 2025 should be viewed with caution. While baseline inflation forecasts suggest moderation, policy changes, weather patterns, and other supply chain events could create significant deviations from these expectations.
Global Food Security Improves Despite Local Challenges
While American consumers grappled with high food prices, global food security showed signs of improvement in 2024. However in 2024, lower inflation, higher incomes, and supply chain improvements are associated with reduced food insecurity in the world’s most vulnerable countries. As a result, 313.0 million fewer people in the world’s most vulnerable countries were projected to be food insecure in 2024, a 27.5-percent decrease from the 2023 estimate. This improvement reflected stabilizing commodity prices and economic recovery in many developing nations.
The contrast between improving global food security and persistent price challenges in wealthy countries like the United States highlighted how different factors affected food affordability. While absolute prices remained high in America, rising incomes in developing countries and falling international commodity prices helped alleviate hunger in regions where food insecurity posed life-threatening risks. This decrease in food insecurity is associated with projected growth in per capita incomes and lower prices for wheat, corn, and vegetable oils.
The food price crisis of 2024-2025 revealed deep vulnerabilities in America’s food system while forcing millions of families to fundamentally change how they shop, cook, and eat. From the devastating impact of bird flu on egg supplies to broader inflationary pressures affecting everything from restaurant meals to grocery staples, the period marked a watershed moment in food economics. While prices began moderating by mid-2025, the cumulative effect of years of increases left lasting changes in consumer behavior and heightened awareness of food supply chain fragility. The response from government agencies and the private sector demonstrated both the challenges of managing complex food systems and the potential for coordinated action to address crises. What would you have guessed about which foods would see the biggest price swings?