December 26, 2011
The US government on Friday (Dec 23) cut its 2011 food-inflation forecast on lower-than-expected price increases at restaurants, but said customers eating at home continue to see price hikes for meat, eggs and dairy products.
The price of all food for 2011 will be up 3.25%-3.75%, the USDA said, down from a November forecast of 3.5%-4.5%. The downward revision is due to a cut in the food-away-from-home inflation forecast, which the USDA projected at 2%-2.5%, down from a November forecast of 3%-4%.
The report shows that consumers, struggling with high food prices in a sluggish economy, have increasingly opted to eat at home instead of going out, said Ricky Volpe, a research economist with the USDA.
The USDA narrowed its food-at-home inflation forecast to 4.25%-4.75%, versus 4%-5% the prior month.
Still, the government continued to raise inflation estimates for many dinner-table staples. Meat, fish and poultry prices are estimated to increase 7%-7.5% in 2011 versus a year ago, up from a prior month forecast of 5.5%-6.5%.
The government also sharply increased the inflation estimate for eggs. It estimates 2011 egg prices will be up 8.25%-8.75%, compared with a November forecast of a 5%-6% rise.
Fats and oils prices are estimated to jump 8.5%-9% from a year ago, up from the November forecast of 6.5%-7.5%.
Food prices have been driven higher this year by high commodity costs as grain supplies remain tight. High grain prices increase the cost of producing meat.
The government reiterated Friday it expects food inflation to cool in 2012. It projects prices for all food to climb 2.5%-3.5% next year, and food at home to increase 3%-4%.