Looking Ahead To 2020: USDA Sees Growth In Away-From-Home Food Markets

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March 31, 2011

Looking Ahead To 2020: USDA Sees Growth In Away-From-Home Food Markets

Each year the Department of Agriculture projects various series for the agriculture industry for the decade ahead. This year's USDA Agricultural Projections To 2020 was recently released and The Food Institute has pulled out some highlights to consider as you engage in planning for the next decade.

Each year the Department of Agriculture projects various series for the agriculture industry for the decade ahead. This year’s USDA Agricultural Projections To 2020 was recently released and The Food Institute has pulled out some highlights to consider as you engage in planning for the next decade. 

U.S. consumer food prices in 2010 had the smallest annual increase since the  1960s. In particular, the 1.3% rise in prices for away-from-home meals was the smallest increase since 1955, partly reflecting promotions to augment otherwise weak demand following the recession.

  • Higher food commodity and energy prices will exert pressure on retail food prices into 2011. Additionally, as the economy recovers, retail food prices are projected to rise faster than overall inflation in 2011 and 2012. Over the remainder of the projection period, consumer food prices in the U.S. rise less than the general inflation rate. This moderation largely reflects production increases in the livestock sector which facilitate gains in per capita meat consumption and limit meat price increases.
  • Higher commodity prices for food grains and oil-bearing crops push projected retail prices for cereals and bakery products and for fats and oils up more than the overall inflation rate in the near term. However, in the longer run, prices for these highly processed foods tend to reflect processing and marketing costs, thus keeping their increases near the general rate of inflation.
  • Retail price increases for food away-from-home slowed in 2009 and 2010 as demand weakened due to the recession and the away-from-home food industry used promotions in response. As the economy rebounds, income gains will support growth in food consumption away-from-home. This factor, along with some linkage to price increases for meat and poultry, suggests that retail prices for food consumed away-from-home are likely to rise more than the overall rate of inflation over the next several years.
  • In the longer run, prices for food away-from-home largely reflect the overall rate of inflation. Competition in the fast-food and foodservice industries tends to moderate away-from-home price increases, keeping their gains close to the general inflation rate over the rest of the projection period.

The U.S. economic recession reduced consumer sales for meals eaten away-from-home in 2009.

  • As the domestic economy rebounds, food expenditures resume stronger growth. As consumer demand strengthens, expenditures for meals away-from-home rise faster than expenditures for food at home and account for a growing share of total food spending, according USDA.


To keep up to date on how these projections play out, be sure to turn to the Food Institute Report and the Food Institute Website at www.foodinstitute.com.