From Beef to Beverages, USDA Now Sees Sharper Food Price Increases in 2026

The U.S. Department of Agriculture (USDA) updated its February forecasts for 2026 food prices one month after they were released. The February report said food prices would rise about 3.1% this year. In March, after seeing newer inflation data, it revised that up to 3.6% for everything from groceries to restaurant meals.

Increases in oil prices since the war with Iran began are the catalyst for the increase.

Overall, prices in the economy (for all goods and services) are up about 2.4% compared with a year ago. Food prices are rising faster, though.

Grocery prices are expected to rise about 3.1 percent in 2026, while restaurant prices are forecast to increase about 3.9 percent.

Beef and veal are already running above where they were a year ago, and USDA expects another increase in 2026. Fresh vegetables, processed fruits and vegetables, cereal and bakery products, sugar and sweets, and nonalcoholic beverages are also forecast to rise faster than their usual pace.

USDA’s food price forecasts are based on statistical models that compare average prices across entire years rather than just one month to the same month a year earlier. As new monthly data arrive, the models update, which is why the projection for 2026 moved upward between February and March.