ARLINGTON, VA. — As inflationary pressures continue to be spotlighted in the food and beverage market, consumers are becoming increasingly concerned about the impact of exogenous factors on food prices, such as the highly pathogenic avian influenza (HPAI) and proposed tariffs.

The findings come from a recent “2025 Inflation and Food Price Outlook” webinar by FMI – The Food Industry Association.

“The Consumer Price Index and the data it represents continues to paint an uncertain picture as worrying spikes in certain categories demonstrate that inflation remains difficult to fully tame,” said Andy Harig, vice president of tax, trade, sustainability and policy development at FMI. “And that's even before we begin to talk about the impacts of tariffs, retaliatory tariffs and all of the other issues that are going on out there, including weather events that seem like they're more severe.”

Harig explained that the year-over-year CPI data show overall inflation from January 2024 to January 2025 increased 3% while food-at-home increased only 1.9%, indicating that food-at-home prices are dropping relative to other prices.

“We've actually seen that food at home is starting to track a little bit slower than the overall inflation rate, which is good for American consumers,” he said. “However, and this is a big however, it's important to note that nearly two-thirds of that increase was due to the ongoing surge in egg prices, driven in large part by the sustained outbreak of highly pathogenic avian influenza.

“Categories like fruits, vegetables, cereals and bakery products all saw declining prices in January. So, a big part of shoppers’ bills are actually seeing the inflation rates start to drop.”

The increase in the food-at-home CPI is being driven primarily by higher costs in categories such as eggs, sugar, sweets and beef, Harig said. Eggs in particular have seen a nearly 40% increase in year-over-year CPI as of December 2024, with a 41% projected CPI increase for 2025.

“Everybody knows that egg prices are at all-time record highs, even adjusting for inflation,” said Ricky Volpe, PhD, associate professor of agribusiness at California Polytechnic State University, San Luis Obispo. “There's no question about that, and that midpoint number for eggs right now is about 41%, which, full disclosure, in the 15 years that I've been tracking CPI numbers, that's the biggest number I've ever seen.”

Harig attributed some of the uptick to factors like weather patterns and packaging challenges but noted that the vast majority was caused by the HPAI outbreak. The spread has resulted in the loss of over 30.1 million birds since January 2025 and more than 68.5 million since January 2024, Harig said.

In addition to the influence of HPAI on egg prices, drought conditions and unusually hot weather in South America and Western Africa is driving the prices of sugar and cocoa to nearly double their historical averages, Volpe said. Meanwhile, the beef category continues to be impacted by elevated input costs, such as water and feed, which has resulted in the lowest inventory of market-ready cattle since 1951 and stubbornly high beef prices.

“All of these categories are among the more volatile of the ones that we regularly track and keep an eye on when we're looking at these CPIs year over year,” Volpe said. “What I'm trying to emphasize is that for these categories where we're seeing worrisome inflation that's probably going to end up being above average, in some cases way above average, there's a specific story. We're not really looking at structural, systemic inflation.”

Harig noted that the Trump administration’s proposed tariffs have been a top concern for consumers. He emphasized that tariffs may impact the industry in less obvious ways, such as effecting the availability of produce that is imported from Mexico when it is out of season in the United States or increasing the input costs of steel and aluminum in packaging.

“One of the challenges of this is that when we see tariffs in place, because they have to make their way through the supply chain, it's rarely a 1-to-1 price transmission,” Harig said. “What we have found is, generally speaking, that the more processed the product is … it tends to be less of an impact. So, if you think about a processed product that might have 10 or 15 ingredients, one or two of those may be impacted by the tariffs.

“But if you're just buying a sort of a raw tomato in the fresh department, that might have a sort of a more direct price transmission. It's tough to sort of figure out exactly how this is going to go. It's also going to depend upon the companies who are going to look at their consumer base and say, you know is, where are they at? What can we pass along? And also, what can we pass along through our supply chain?”