US food prices seen up on higher meat costs

US consumers can expect to pay 4-5% more for food by late this year than at the end of 2009 largely due to higher costs for such staples as beef, dairy, and pork, a Nebraska-based economist said.

"We have beef, pork, and dairy prices all increasing substantially since December, in the area of roughly 10%," said Bill Lapp, economist and president of Advanced Economic Solutions.

Food inflation, like overall inflation, has been tame for the past few months. But food inflation should gain traction as the year proceeds, Lapp said.

Higher meat prices are due to cattle and hog producers shrinking herds after years of losses, which should mean less beef and pork, with USDA estimating 2010 US beef production down 1.3% from 2009 and pork production down 2.5%.

Milk production this year may be similar to 2009's, but USDA estimates wholesale milk prices up 21-26% this year and cheese prices up 16-20%. Analysts attributed those increases to less cheese production and stronger exports of dairy products.