USDA Forecasts Higher Food Prices Through 2027 as Beef, Wheat Markets Strengthen.
The U.S. Department of Agriculture's Economic Research Service (ERS) is forecasting continued increases in food prices through 2027.
According to the latest Food Price Outlook report, all food prices are expected to rise by 3.0 percent in 2026. Food purchased for consumption at home is forecast to increase by 2.5 percent, while food-away-from-home prices, including restaurant meals and food service purchases, are projected to rise 3.6 percent.
Looking ahead to 2027, USDA expects food inflation to moderate slightly. Overall food prices are forecast to increase 2.4 percent, with grocery prices rising 2.1 percent and restaurant-related food costs increasing 2.7 percent.
The report suggests food inflation is moving closer to historical averages after several years marked by significant volatility across agricultural markets.
Beef Prices Remain Elevated
Cattle and beef continue to be among the strongest-performing agricultural markets.
Farm-level cattle prices declined slightly between June and July 2026 but remained nearly 5 percent above year-earlier levels. USDA attributes the strength to ongoing herd contraction across the United States, which has tightened supplies and supported prices.
As a result, farm-level cattle prices are forecast to increase 9.9 percent during 2026.
Wholesale beef prices are also expected to remain strong. Although wholesale prices eased month-over-month in July, they remained significantly above year-ago levels. USDA forecasts wholesale beef prices will rise 9.4 percent this year.
For livestock producers, higher cattle prices can support revenues. However, processors, retailers, and consumers may continue to feel the effects of tighter supplies and elevated beef costs.
Egg Prices Move in the Opposite Direction
While cattle markets remain strong, egg prices have experienced a dramatic reversal.
The egg industry has endured years of volatility due to Highly Pathogenic Avian Influenza (HPAI), which disrupted production and caused substantial price swings between 2022 and 2025.
Now, as flock rebuilding continues and production recovers, USDA expects farm-level egg prices to fall sharply. Farm-level egg prices in July 2026 were 79 percent lower than the same month one year earlier.
For the year, USDA forecasts egg prices will decline by 82.1 percent compared to 2025 levels.
The recovery provides relief for consumers and food manufacturers that rely heavily on eggs, while illustrating how rapidly agricultural markets can shift as production conditions improve.
Milk and Fruit Prices Forecast Lower
Dairy producers may face additional pressure in 2026.
Farm-level milk prices were lower both month-over-month and year-over-year in July. USDA forecasts milk prices will decline 6.3 percent during 2026.
Fruit producers are also expected to see softer pricing. Although fruit prices remained higher than year-earlier levels in July, USDA forecasts farm-level fruit prices will decrease 3.7 percent this year.
Lower prices can benefit consumers but may compress margins for producers already dealing with elevated input costs.
Vegetable Prices Remain Volatile
Fresh vegetable markets have experienced some of the most dramatic price swings in the agricultural sector this year.
During the first half of 2026, farm-level vegetable prices recorded substantial year-over-year increases, with gains exceeding 50 percent in several months. Prices later retreated sharply during the summer.
Despite the decline in July, USDA still expects farm-level vegetable prices to increase 17.8 percent for the year.
The forecast highlights ongoing volatility in fresh produce markets, where weather conditions, seasonal production patterns, labour availability, and transportation costs can all influence pricing.
Wheat Prices Rise on Tighter Supplies
Wheat has emerged as another major story in USDA's latest outlook.
Farm-level wheat prices climbed more than 25 percent compared to year-earlier levels in July. USDA links the increase to expectations for significantly lower U.S. wheat production.
The agency's recent Wheat Outlook report projected a substantial decline in domestic wheat output, tightening supplies and supporting stronger prices.
USDA now forecasts farm-level wheat prices will increase 17.1 percent in 2026.
For grain growers, stronger wheat markets may offer opportunities to improve profitability. However, higher wheat prices can eventually influence costs throughout the food chain, affecting products ranging from bread and baked goods to livestock feed.
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