Time to Stock Up at the Grocery Store
Eggs, meat, coffee and cheese are cheaper thanks to bumper crops and low fuel prices.
Make room in your cupboards and freezers, supermarket shoppers. Prices for food for home consumption saw 10 straight months of year-over-year deflation through September—the longest period since 1960, according to data from the U.S. Bureau of Labor Statistics. In the 12 months through September, prices for groceries sank 2.2% overall. (Dining out was another story: Prices for food away from home rose 2.4% over the same period.)
Some categories have experienced sharper drops than others, with eggs, dairy and meat leading the way down. Egg prices plunged by half in the previous 12 months through September, from an average $2.97 to $1.47 for a dozen large eggs—a return to earth after an avian flu outbreak caused prices to spike last year. Whole milk declined by 4.8%, and cheddar cheese descended by 6.7%.
Among meats, ground beef was recently $3.67 a pound, down 11.2% from a year earlier, and USDA Choice boneless round roast was $5.02 a pound—a 10.4% drop. Pantry items with notable price declines include creamy peanut butter, coffee and dried beans.
Bumper crops combined with a strong dollar, which has made U.S. food products less competitive overseas, have helped fuel the abundance, says Rupesh Parikh, an executive director and senior analyst for Oppenheimer & Co. Well-fed cattle have increased food supplies, too, and reduced transportation costs are also pushing food prices down. Oppenheimer analysts think the food deflation could last into mid 2017. But the U.S. Department of Agriculture expects supermarket prices to rise by 1% to 2% for the year—so you may be wise to stock up soon.