USDA completes retail food price study amid election campaign disagreements over inflation

The Agriculture Department is working on a study of retail food prices that will likely raise questions about the industry's practices, Agriculture Secretary Tom Vilsack said Thursday.

The study comes as Republicans continue to attack Vice President Kamala Harris over food inflation that has occurred since she and President Joe Biden took office in 2021. Harris is expected to discuss an economic plan on Friday that includes a crackdown on what she says is price gouging by food companies.

Vilsack, speaking to reporters at an American Coalition for Ethanol conference in Omaha, declined to comment on Harris' plan, citing Hatch Act restrictions on political activity by federal employees. But he said the USDA study will be “coming out very soon.”

“I think it will raise some legitimate questions and issues about practices within the industry that ultimately impact the price people pay and that deserve closer scrutiny,” Vilsack said.

Vilsack said he believes the USDA's current partnership with the Justice Department is beneficial in ensuring competition in the food and agriculture sectors.

“We are pleased with the work of the Department of Justice in cracking down on potential antitrust violations,” Vilsack said.

The Federal Trade Commission released a report earlier this year saying that large grocery chains used their size to gain an edge over smaller competitors when the pandemic disrupted supply chains.

The companies “Directives that imposed strict delivery requirements on their suppliers and threatened fines for non-compliance. “Over the course of the pandemic, Walmart even tightened its suppliers’ delivery requirements to avoid fines,” the report said.

Since the pandemic, Vilsack has also been trying to expand meatpacking opportunities for ranchers by funding new processing capacity. The U.S. Department of Agriculture (USDA) announced a new round of grants last month totaling $110 million for projects in 30 states.

The Meat and Poultry Processing Expansion Program provides funding to build or expand processing facilities, install new equipment, ensure packaging and labeling requirements are met, and help companies achieve their workforce goals.

Food prices began rising sharply in 2020, before Biden took office, but inflation has slowed significantly over the past year. The consumer price index for food consumed at home rose 3.5% in 2020 and 2021, 11.4% in 2022, and 5% in 2023, while the food price index has risen only 1.1% since July 2023.

The Economic Research Service of the U.S. Department of Agriculture (USDA) forecasts that food prices will increase by 1% in 2024 compared to 2023 and only 0.7% in 2025. The average inflation rate over the past 20 years for food consumed at home is 2.7%.

In the first year of the Trump administration, food prices fell slightly by 0.2 percent in 2017, and before the pandemic they rose only 0.4 percent in 2018 and 0.9 percent in 2019.

Scott Lincicome, vice president of general economics at the Cato Institute, a libertarian think tank, responded on X to reports about Harris' economic plan by pointing to a New York University survey that he said showed that the grocery industry's net profit margin was 1.18 percent last year.