LOS ANGELES – The U.S. Department of Agriculture said Monday that domestic food prices will rise five percent in 2008, driven by higher costs of bread and other bakery products.


The Los Angeles Times reported that it would be the second consecutive year of high food price inflation with more increases expected. The rise will also be the largest increase since 1990.


Prices of cereals and bakery products are forecast to zoom by 8 percent this year, the Times reported, up 2 percentage points from USDA's initial forecast.


"That's what happens when wheat prices double in six months," Ephraim Leibtag, a USDA economist who tracks food prices, told the newspaper.


Sharp increases are forecast for eggs, fats and oils this year. Meat, poultry and fish prices, forecast for minor increases this year, will be a leading reason for higher food prices in 2009, Leibtag told the Times, because high feed prices will limit meat production.