Filling grocery carts has been costly throughout the past year, and economists at Goldman Sachs don't see the elevated prices leaving anytime soon.
A report to clients from Goldman Sachs projected the food-at-home category of the consumer price index to increase another 5% to 6% this year, CNN reported.
This would continue a trend seen throughout the last year and most recently last December.
The Bureau of Labor Statistics reported a 6.5% increase in food at home prices from December 2020 to December 2021. No month has seen that large of an increase since December 2008. In the last month of 2021, meat went up 14.8%, Chicken 10.4%, and eggs 11.1%.
And the trend doesn't show signs of stopping. So far this year, food has already gotten more expensive, with the Wall Street bank citing a 6% jump in food commodity prices.
Part of the reason for high food prices starts at farm levels with things like fertilizer, which has quintupled in price, getting costlier. Because of this, Goldman Sachs thinks that prices are set up to rise.
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"The stage has been set for further substantial increases in retail food prices this year," the report from Goldman Sachs economists said.
Since 2020 the price of groceries in the consumer price index has gone up by 11%. This is the fastest rise since the financial crisis, Goldman Sachs added.
The bank said several factors have played a role in food commodities going up almost 40% since 2020, including bad weather, tight inventories, strong demand, and poor crop yields.
The rate of inflation has affected more than food, but food has played a role in the most significant inflation spike seen in almost four decades.
Price gains could be slowed if demand doesn't continue due to an expected decline in food and nutrition benefits. However, food prices could go up as "companies might pass along a greater share of higher input costs when these increases are larger or more durable."
Whether the cost of food goes up or down in the coming months, Goldman Sachs shared that they "see risks in both directions."
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