The food price forecasts are out for the upcoming New Year, and the news isn’t exactly encouraging.
The forecasts show that 2013 is on track for three to four percent inflation on all food, and on food here at home.
USDA Economist Ricky Volpe said the increase in inflation is largely due in part to the drought that is plaguing the Midwest.
“That means that even at the low end of this forecast, we are looking at ending up above normal food price inflation, with normal being between two to three percent on the year”, said Volpe. “That difference between normal inflation and what we are expecting is almost due entirely to the drought.”
Volpe said that higher feed prices for animals create a domino effect on food prices in other categories.
“We are looking at inflation to pick up for most meat and animal products. Basically higher feed prices are going to reverberate throughout the marker, and result in higher food prices in other categories”, said Volpe.
In years past, the food price inflation rates have generally been around two to three percent.