The Consumer Price Index (CPI) for food is a component of the all-items CPI. The all-items CPI measures price changes for all consumer goods and services, including food, whereas the CPI for food measures the changes in the retail prices of food items only.
Changes in the CPI are widely used to measure inflation in the U.S. economy. The CPI for food at home is the principal indicator of changes in retail food prices and is closely followed by industry analysts, food market participants, and policymakers.
Forecasting the CPI for food has become increasingly important due to the changing structure of food and agricultural economies and the important signals the forecasts provide to farmers, processors, wholesalers, consumers, and policymakers.
At ERS, work on the CPI for food consists of:
- reporting the current index level for food,
- examining changes in the CPI for food, and
- constructing forecasts of the CPI for food for the next 12-18 months.
In the following news clip, ERS Economist Richard Volpe and C-SPAN's Washington Journal Host John McArdle discuss the CPI for food, as well as some of the factors that affect food prices.
Volpe CSPAN CLIP