Food costs are rising again. Here’s why.

Unfortunately for inflation-weary consumers, 2025 won’t bring any immediate reprieve as food costs are projected to continue rising due to environmental factors and recent outbreaks threatening food safety.

As of December, overall food inflation was 2.5% year over year, according to the Bureau of Labor Statistics’ consumer price index summary. Grocery prices (described as “food-at-home”) rose 0.3% month over month in December, while dining costs (also known as “food-away-from-home”) experienced a similar hike. 

Average annual food-at-home prices were five percent higher in 2023 compared to 2022, according to the United States Department of Agriculture (USDA). The department found that prices for fats and oils rose nine percent, which was the highest hike amongst food products in 2023. Prices of sugar and sweets increased 8.7% while cereals and bakery products increased 8.4%. Increases were also noted for beef and veal (3.6%), eggs (1.4%), fresh vegetables (0.9 %), fresh fruits (0.7 %) and fish and seafood (0.3 %).

The recent price hikes can’t be attributed to just one factor, The Wall Street Journal first reported. A recent — and ongoing — bird flu outbreak is killing chickens nationwide and, consequently, causing egg prices to soar.

The cost of eggs has been on the rise since 2022, when U.S. officials confirmed a highly pathogenic strain of avian influenza (H5N1) in a commercial flock. Last June, a flock of approximately 103,000 turkeys in Cherokee County, Iowa, was reportedly infected with bird flu, per the Iowa Department of Agriculture and Land Stewardship. Another outbreak was reported amongst a flock of about 4.2 million egg-laying chickens in Sioux County, Iowa. In December, a patient in Louisiana was hospitalized with a severe case of H5N1 bird flu, the Centers for Disease Control and Prevention (CDC) confirmed. Since April 2024, there have been a total of 61 reported human cases of H5N1 bird flu within the U.S.

“Eggs are one of the primary drivers of food inflation,” the WSJ’s Patrick Thomas and Jesse Newman wrote. “The index for eggs was up 37% from a year ago, according to the latest Labor Department figures, and the average retail price of a dozen large eggs increased nearly 14% to $4.15 in December.”

In California — where a state of emergency was declared over growing concerns about bird flu, which has spread amongst dairy cattle and humans — the average cost of a dozen eggs is now $8.97, Barron’s reported. As of recently, the average cost for a carton of eggs is $4.85 per dozen, according to the USDA.

“The outbreaks have the potential to affect prices for poultry and even dairy products, too,” Barron’s Megan Leonhardt said. “Avian influenza was first detected in dairy cattle in March 2024 and has led to reduced milk production.”

Lower prices are a possibility if the number of bird flu cases starts to dwindle. But considering that the outbreak remains rampant (the latest outbreak has plagued Long Island’s last major commercial duck farm), that doesn’t seem likely for the time being. In fact, U.S. producers are projected to face more outbreaks and fewer egg supplies this year.

Alongside bird flu, extreme environmental conditions and national disasters have caused food prices to soar. Ongoing drought conditions in the Western and Plain states have threatened the livelihood of livestock, forcing many producers to start cutting back on their herds. 

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“When drought conditions diminish forage production and availability, beef cattle producers often must buy supplemental feed and forage or reduce their herd size,” the USDA explained. “Periods of more intense drought are associated with decreases in the U.S. beef cattle herd size, such as when the national beef cattle herd shrank about 1 to 2 percent a year during drought between 2011 and 2015.”

Data from the Bureau of Labor Statistics found that sirloin steak prices increased 38% since 2019 while ground beef prices rose 45%. Sirloin steak prices averaged $11.67 per pound in December, compared to November’s high of $12.01 per pound. Ground beef prices averaged $5.61 per pound in December, compared to an astounding $5.67 in September.

Meat and eggs aren’t the only food items rising in price. Some of our favorite sweet treats are also becoming more costly due to the higher costs of cocoa and sugar. The WSJ reported that an unnamed candy company will raise its prices by 10%. Similarly, Conagra Brands will raise the prices of Swiss Miss hot cocoa and Duncan Hines products. The high cost of cocoa beans, fueled by climate change, has also encouraged major snack companies like Hershey and Mondelez to continue upping their prices.