Thursday, January 27, 2011

USDA ERS Food Price Projections

USDA's Economic Research Service has recently released its latest projection s on food prices for 2011. The report:


In 2011, the Consumer Price Index (CPI) for all food is projected to increase 2 to 3 percent. Both food-at-home (grocery store) and food-away-from-home (restaurant) prices are also forecast to increase 2 to 3 percent. Although food price inflation was relatively weak for most of 2009 and 2010, higher food commodity and energy prices have recently exerted pressure on wholesale and retail food prices. Hence, higher prices are projected to push inflation toward the historical average inflation rate of 2 to 3 percent in 2011.

The all-food CPI increased 0.8 percent between 2009 and 2010, the lowest food inflation rate since 1962. Food-at-home prices increased by 0.3 percent—the lowest annual increase since 1967—with cereal and bakery prices declining 0.8 percent and processed fruit and vegetable prices dropping 1.3 percent, while food-away-from-home prices rose 1.3 percent in 2010, the lowest annual increase for restaurant prices since 1955.

The data shows retail dairy prices to rise most dramatically. Get ready for the usual suspects to call for lower dairy farm milk prices.

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