Grocery
American shoppers face another year of high food prices as supply shortages drive costs up. (PHOTO: Rollz International/Pexels)

Faster than most prices are rising, your grocery spending continues to increase—a trend unlikely to slow in the coming months.

In December 2025, food expenses rose by 3.1% compared to the previous year, according to the Bureau of Labour Statistics. This is higher than the overall inflation rate of 2.7%, further straining family budgets already stretched after several years of rising prices.

The US Department of Agriculture's Economic Research Service forecasts that food prices will increase by 3% in 2026. Grocery store prices are expected to rise by 1.7%, while restaurant and takeaway costs could jump by 4.6%, well above their 20-year average of 3.5%.

What's Getting More Expensive

Six food categories are predicted to grow faster than their historical averages this year. Here's what shoppers should expect:

  • Beef and veal: Prices were 16.4% higher in December 2025 than a year earlier, according to the USDA data. Ground beef specifically climbed 15.5%, while beef steaks surged nearly 18%. The USDA predicts beef prices will rise a further 9.4% in 2026.
  • Coffee: Prices jumped nearly 20% year-on-year in December 2025 driven by droughts in Brazil and Vietnam that devastated harvests.
  • Sugar and sweets: Up 6.9% in December compared to the previous year, with a further 6.7% increase forecast for 2026. Chocolate and confectionery have been particularly affected by soaring cocoa costs.
  • Nonalcoholic beverages: Rose 5.1% year-on-year, with a predicted increase of 4.2% this year.
  • Fresh vegetables: Expected to climb by 2% in 2026 after volatile swings caused by unpredictable weather patterns.
  • Canned goods: Tariffs on steel and aluminium have pushed packaging costs up by 16% over the past year, according to government wholesale price data, keeping processed fruit and vegetable prices elevated.

The Beef Crisis Explained

The dramatic surge in beef prices stems from a combination of drought, shrinking herds, and persistent consumer demand.

Currently at its lowest point since the 1950s, the US cattle population is shrinking rapidly, according to USDA data. Droughts have spread across key ranching regions, making feed increasingly expensive. Farmers have responded by sending more cattle to market—not by choice, but under financial pressure—further draining herds just as growth is needed most. Rebuilding these herds will take time, as nature cannot be hurried.

'We have got to build the herd, period,' Nate Rempe, CEO of Omaha Steaks, told CNBC in December. 'The cost of beef has increased so much that it's really starting to hit our bottom line.'

David Ortega, a food economist at Michigan State University, explained that even if ranchers start retaining heifers for breeding today, meaningful supply improvements are unlikely to reach supermarket shelves before 2028. The reproductive cycle of cattle is slow, and supply cannot be accelerated.

Where Prices Are Falling

Not all food prices are rising. Egg prices, for example, plummeted 20.9% in December compared to the previous year, as production recovered from avian influenza outbreaks, according to USDA data. The agency forecasts a further 22.2% decline in 2026. Pork prices are expected to dip slightly by 0.3%, and dairy costs should also decrease as milk production increases.

How Households Can Adapt

Daniel Burrus, a business and technology trends consultant, told AARP that retirees and lower-income households are likely to 'face disproportionate pressure' from rising food costs. 'They're going to be the ones hurt the worst,' he said.

Financial experts recommend strategies such as shopping smarter by building meals around items on sale. Swapping branded products for store labels can save money without sacrificing taste, as many house brands are comparable. Being mindful of waste also helps; reducing scraps that go in the bin puts cash back into household budgets. Checking supermarket apps periodically might reveal hidden deals that could lower expenses with minimal effort.

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