Food Prices Dropped in 2016, Likely to Increase in 2017

For the first time in about 50 years, shoppers paid less at the grocery store this year than they did in the previous year.

USDA Economist Annemarie Kuhns said food prices dropped about one-half to one and a half percent in 2016.

“We’re expecting to pay less for most all food categories in the grocery store with the exception of fresh fruits and fresh vegetables.”

In the ag sector, meat and animal products such as milk and eggs saw declines year-over-year.

In 2017, Kuhns expects prices to increase by about one-half to one and a half percent, though that could change significantly.

“Interest rates were just raised which could further strengthen the U.S. dollar which puts downward pressure on prices as imports become less expensive for us and our exports become less desirable so it keeps more goods on the U.S. market.”

Also potentially impacting prices is the rising cost of oil and transportation which might negate any decreases.