The U.S. government left its food-price inflation forecast unchanged in a monthly report and projected that a sharp climb in prices will abate in 2012. The price for all food in 2011 is expected to rise between 3.5% and 4.5%, the U.S. Department of Agriculture said, followed by an increase of 2.5%-3.5% in 2012. Both projections, along with all of the various food categories in the report, were unchanged from a month ago, reports Dow Jones.
In October, the USDA had increased its 2011 food-inflation forecast by half of a percentage point, reflecting sharply higher commodity costs. Consumers are seeing the biggest jump in prices in the meat aisle, with the USDA projecting meat prices to climb 6.5%-7.5% in 2011, followed by a 3.5%-4.5% increase next year. Soaring feed costs and strong export demand has helped push prices of beef and pork to record highs this year.
Feed prices have retreated recently, although they remain well above historical averages. The price of front-month Chicago Board of Trade corn futures, which peaked at an all-time high of $7.9975 per bushel in June, closed Wednesday at $5.8875.
Source: Dow Jones