If inflation is down, why are food prices still going up

1. Different baskets, different rhythms: why “inflation is down” can coexist with rising grocery bills

Macro headlines about inflation often cite the all-items CPI or “core” inflation that strips out food and energy, whereas grocery and restaurant prices are measured separately and have their own momentum; for example, food prices rose 0.7% month-over-month in December 2025 even as overall CPI was just 0.3%, and USDA forecasts still predict overall food prices to rise roughly 2.3–3.0% in 2026 ^{[1] [4] [2]}.

2. Persistent, uneven category shocks keep some food costs climbing

Not all foods move together: beef is expensive because the U.S. cattle herd is at historic lows after pandemic and drought-driven herd reductions; eggs and poultry have been volatile from avian flu and feed costs; cocoa and sugar have driven confectionery price increases; and these concentrated supply problems can push specific categories—ground beef, chocolate, dairy—much higher even as other items moderate ^{[5] [6] [7] [8]}.

3. Supply-chain and input-cost stickiness: cans, freight, labor and tariffs

Some cost increases are “sticky” because they sit upstream — higher costs for aluminum and steel raised can prices after tariffs and that raises canned fruit and vegetable prices, logistics and labor shortages add ongoing costs in processing and distribution, and food companies sometimes keep prices firm to protect margins even as broader inflation eases ^{[3] [8] [7]}.

4. Restaurants and “food away from home” amplify the perception of higher food inflation

Prices for meals eaten outside the home have generally risen faster than groceries in recent years, and food-away-from-home inflation remains above its historical average; that makes overall food spending feel more painful for households who eat out or buy prepared foods, a factor the USDA and reporters highlight when they warn relief won’t be universal ^{[2] [9] [5]}.

5. One-off monthly spikes and measurement quirks can make food look worse in short windows

Monthly CPI swings matter to consumers: December 2025 showed an outsized 0.7% food increase — the largest month in years — partly reflecting seasonal patterns and reversible effects, and official data can also be distorted by one-off events (like government shutdown data gaps) that make short-term comparisons noisier than year-long trends ^{[1] [10] [4]}.

6. Forecasts point to slower—but still positive—food inflation, so sticker shock can persist

Most authoritative forecasts expect food-price growth to decelerate toward historical norms but not return to pre-pandemic levels immediately; USDA and other analysts predict food inflation still near 2–3% in 2026, meaning grocery bills will keep rising for many households even as the headline inflation story softens ^{[2] [11] [12]}.

7. Politics, corporate strategy and who benefits from the narrative

Political actors and industry executives have incentives to frame the story in ways that suit them: administrations may tout cooling headline inflation as a victory while critics point to grocery pain as a domestic risk, and food companies sometimes cut or raise prices strategically to protect market share or margins — all of which complicates the public understanding of why groceries still sting ^{[10] [8] [13]}.

8. Bottom line: relief is coming, but not evenly or immediately

The data and forecasts point to disinflation broadly, but food is being driven by concentrated supply issues, input-cost stickiness, category heterogeneity and strategic pricing behavior; that combination explains why consumers can see grocery and restaurant bills climb even as the broader inflation headline cools and why economists forecast modest but positive food-price increases in 2026 ^{[6] [2] [7]}.