ARLINGTON, Va. – Food prices are forecast to increase 3.4 percent this year, led by eggs, sugar and sweets, and non-alcoholic beverages, according to a USDA agricultural economist who spoke during the agency’s 101st Agricultural Outlook Forum 2025.

Last year, food prices rose 2.3 percent, lower than the 20-year average of 2.9 percent.

“I don’t think I need to convince anyone here why we should care about food prices,” said Megan Sweitzer, who works in the food economics division of the USDA’s Economic Research Service. “Food price changes have impacts across the economy. They affect producers. They affect retailers and consumers.”

Spending on food accounted for 12.9 percent of total household expenditures in 2023, the latest data available, she said. Food was the third-highest household spending category after housing and transportation.

Sweitzer spoke Feb. 27, the first day of the two-day event.

Egg prices are predicted to increase this year by 40.1 percent on average due to the ongoing highly pathogenic avian influenza (HPAI) outbreak among egg layers, Sweitzer said. Eggs were up 8.5 percent in 2024.

“Forty percent is a huge number,” she noted. “Egg prices increased by 14 percent alone in January, a month where almost 20 million commercial egg layers were affected in the outbreak, which was the highest number of any month so far. (That came) on the heels of multiple million birds affected in October through December as well.

“This 40 percent forecast does not mean that we expect prices to go up 40 percent from this peak in January, where we are right now, where eggs cost about $5 a dozen on average. A portion of that 40 percent predicted price increase has already happened just in January alone.”

Last year, the average price for a dozen large grade A eggs was $3.17.

Given what’s known about the scope of the continuing HPAI outbreak in February, Sweitzer said, “it’s quite likely that prices could continue to go up in the short term and that the next point on the chart could be higher, but it’s also likely that in 2025, there will be a peaking point and there will be a drop like we saw in those other intense periods of HPAI in 2015 and 2022.”

Eggs account for 1.3 percent of total food spending, she added.

The rise in food prices last year trailed only increases in housing and medical care. Average prices across all categories, also including recreation and apparel, rose 3 percent.

Food prices are still rising, but at a lower pace than when food-at-home (or grocery) price inflation peaked in August 2022 at 13.5 percent, she said.

Prices have risen over 25 percent since January 2020, but were relatively stable for several years before the pandemic, Sweitzer said. “What many consumers have anchored in their minds as typical prices are prices from the time prior to the COVID-19 pandemic.”

Sugar and sweets are predicted to increase 6.4 percent in 2025; last year, they rose 3 percent. Non-alcoholic beverages are projected to rise 4.4 percent.