Overall grocery inflation is slowing — but that headline hides the real story. Beef is up 15% year over year. Sugar and candy are up 5.7%. Non-alcoholic beverages are up 4.5%. And the average American family now spends $170 a week on groceries, up from $120 in 2020.
By Elena Tran · Staff Reporter, Economy & Consumer Prices
March 10, 2026 · National · Data: USDA ERS Food Price Outlook, February 25, 2026
According to the USDA Economic Research Service Food Price Outlook released February 25, overall grocery prices are predicted to rise 2.5 percent in 2026 — below the 20-year historical average of 2.6 percent, and slower than last year’s 2.3 percent. That sounds like good news. It is, partially. But the aggregate hides deep variation across the grocery cart, and for the categories where prices are rising the fastest — beef, sugar, beverages — the increases are well above the headline and have compounded across several years of prior inflation. The average American household now spends $170 per week on groceries, up significantly from $120 in 2020 — an increase that exceeds the general inflation rate over that period, according to FMI data presented at the USDA’s annual Agricultural Outlook Forum.
📊 USDA 2026 Food Price Outlook — Key Numbers
+2.5%
Overall grocery inflation forecast 2026
+6.7%
Sugar & sweets — highest increase of any category
+5.5%
Beef & veal — already up 15% year over year
+5.2%
Non-alcoholic beverages — coffee, juice, soda
–27.4%
Eggs — only category predicted to decline in 2026
$170
Avg. weekly grocery spend per household — up from $120 in 2020
The Categories Rising Fastest — and Why
Sugar and sweets are projected to see the largest price increase of any grocery category in 2026, at 6.7 percent, with candy and chewing gum experiencing the largest hikes within that group. The drivers are structural: changing weather patterns affecting domestic sugarcane production in Florida and Louisiana, tariffs on imported sugar from India, and rising transportation costs. Chocolate in particular is being hit by a double compression — global cocoa supply disruption and tariff-driven cost increases on imported inputs, making it one of the most affected packaged goods on the shelf.
Beef remains the category where the year-over-year reality is most stark. Beef and veal prices were 15 percent higher in January 2026 than in January 2025, even after a slight monthly dip. The underlying cause has not changed: the U.S. cattle herd is at a historic low, having declined steadily since 2019, while consumer demand has remained strong. Ground beef hit a record $6.23 per pound in September 2025, according to St. Louis Federal Reserve data. Michigan State food economist David Ortega put it plainly: “When you add that to strong consumer demand for beef, you have supply constraints. Prices have nowhere to go but up.”
Non-alcoholic beverage prices rose 1.6 percent from December 2025 to January 2026 and were 4.5 percent higher than in January 2025, driven in part by elevated global coffee prices. For context: the 20-year historical average annual increase for this category is 2.4 percent. At 5.2 percent projected for full-year 2026, beverages are running more than double their long-run average. Coffee, which is entirely imported and therefore fully exposed to tariff costs, is one of the primary drivers. Consumers in Orlando have already noticed: one shopper told ConsumerAffairs that a case of Diet Coke at Walmart had gone from $7.88 to $12.88.
The Full Picture: All 15 USDA Categories
| Category | 2026 Forecast | Jan. 2026 vs. Jan. 2025 | Trend vs. 20-yr avg. |
|---|---|---|---|
| Sugar & sweets | +6.7% | +5.7% | Above average |
| Non-alcoholic beverages | +5.2% | +4.5% | Above average |
| Beef & veal | +5.5% | +15.0% | Above average |
| Fish & seafood | +2.4% | Rising | Above average |
| Cereal & bakery products | Rising | Large swing | Above average |
| Processed fruits & vegetables | Rising | Large swing | Above average |
| Other meats (cold cuts, hot dogs) | +4.3% | Rising | Above average |
| Pork | +1.9% | +1.4% | Below average |
| Fresh vegetables | +1.4% | +0.8% | Below average |
| Fresh fruit | +0.2% | –0.5% | Below average |
| Poultry | +0.1% | +1.6% | Below average |
| Dairy | –0.9% | Easing | Below average |
| Eggs | –27.4% | –34.2% | Declining — HPAI recovery |
Source: USDA Economic Research Service — Food Price Outlook, February 25, 2026
The One Bright Spot: Eggs
Eggs are the single category the USDA expects to decline meaningfully in 2026. Retail egg prices fell 5.3 percent from December 2025 to January 2026 and were 34.2 percent lower than in January 2025. The cause is the reversal of the bird flu crisis that drove egg prices to record highs in late 2024 and early 2025: confirmed cases of Highly Pathogenic Avian Influenza tapered in April 2025, and U.S. egg production has since recovered and is expected to continue improving through 2026. USDA projects a full-year decline of 27.4 percent. For households that shifted heavily toward eggs as an affordable protein alternative during the beef price surge, that is meaningful relief.
“Consumers, especially those on fixed, low incomes, will face difficult food purchase decisions as food prices rise faster than incomes.”
— Christopher Barrett, Professor of Applied Economics, Cornell University
Why Your Bill Is Higher Even When Inflation “Slows”
The USDA’s 2.5 percent forecast is a rate of change — it describes how much faster prices are rising, not where prices are. After an 11.4 percent spike in 2022, 6.5 percent in 2023, and cumulative gains since, grocery prices in 2026 are approximately 25 percent higher than they were in 2020 across the board. A slowdown in inflation does not reduce that base. An FMI survey from January 2026 found that 62 percent of consumers said they were very or extremely concerned about rising food prices — high, but six percentage points lower than a year earlier. Concern is moderating, but the bills have not come down.
💡 What to Do at the Grocery Store Right Now
Switch proteins where possible — poultry (+0.1% projected) and pork (+1.9%) are holding far better than beef (+5.5%). Buy fresh fruit over processed: fresh fruit is up just 0.2% vs. processed fruits and vegetables running well above average. Store brands now cover 100% of American households per Spins data — and in cereals, beverages, and bakery items (the fastest-rising categories), store brand quality is largely indistinguishable from name brands at significantly lower cost.