Washington, D.C. – In 2020, food-at-home prices saw their largest increase in nine years. This year is not expected to be any different, according to the USDA.

For 2021, the agency forecasts an increase of 2-3 percent for food-away-from-home (restaurants and other food services) prices. Food-at-home prices are expected to climb 1-2 percent from last year. According to the USDA’s Economic Research Service, food prices rose 0.4 percent in 2018 and 0.9 percent in 2019.

Food inflation is at almost twice the Federal Reserve’s inflation target, Sal Gilbertie, president and chief investment officer at Teucrium Trading, told Barrons. Meats and grains, and grain products such as bread, show “much higher overall rates of inflation,” he said. U.S. Bureau of Labor Statstics data reveal an unadjusted increase of 3.9 percent in food overall from January 2020 to January of this year, led by a 5.5 percent jump in the meats expenditure category.

Gilbertie attributes that higher inflation rate to the rise in grain prices and the “failure and subsequent rebuild of China’s hog herd.” The Chinese had to import large amounts of animal proteins to replace the lack of meat from hog herds hit hard by African swine fever. Afterward, China imported grains to feed the hogs as the nation worked to rebuild their numbers, he said.

Another primary reason for the rise in food costs last year, however, was packing plant disruptions which left many meat processing facilities closed. When meat packing plants suspended or slowed operations, the disruptions contributed to sharp increases in the processing cost of consumer-ready meat products.

USDA data for the year showed that the average price paid to livestock, poultry and dairy producers at the farm level dropped by almost 20 percent for April. At the same time, consumer prices for meat, poultry, fish and eggs skyrocketed, and by June, consumer prices were more than 10 percent above the March level.

According to the Census Bureau, grocery sales skyrocketed by 32 percent last March and have remained strong, averaging $6 billion a month above pre-COVID levels. Overall, grocery sales averaged 11 percent above average during 2020 than in 2019, an average of $63 billion.

While the contracting U.S. economy was expected to reduce disposable income and cause consumers to buy less meat and other high-value food products for at-home consumption, that didn’t end up being the case, according to researchers at the Food and Agricultural Policy Research Institute.

“Consumer meat prices increased by more than 6 percent in 2020, while domestic per-capita meat consumption also increased slightly,” said Greg Pompelli, leader of Texas A&M’s Cross-Border Threat Screening and Supply Chain Defense, who examined the data. “This is one of the surprising outcomes for a year in which the pandemic’s disruptions and negative impact on the domestic economy signaled a weak outlook for livestock producers.”

A fall survey by Supermarket News sent to food retailers and wholesale distributors across the nation seemed to foretell that conclusion. When asked, “How has the coronavirus pandemic impacted your in-store center store sales?,” 55 percent of survey respondents said the pandemic has led to an increase in center store sales of 10 percent or more, while another 27 percent expected to see sales increases of 5-10 percent.

As expected, away-from-home purchased did fall. For the year, sales were down 15.5 percent from 2019’s level. That trend is continuing into 2021 as figures for January indicate that “food services and drinking places” are nearly 16 percent lower than in January 2020.