Food Price Deflation Will Not Last Forever
Look for food price inflation to escalate next year based on new projections from the Department of Agriculture reports The Food Institute. Overall food prices in the United States in 2010, including food eaten at-home and away-from-home, are expected to rise between between 3% and 4% with retail food prices seen rising between 2.5% and 3.5%, and food-away-from home prices up 3.5% to 4.5%.
Center of the plate items, such as beef, pork and chicken are seen advancing 1.5% to 2.5%, while fish & seafood is forecast to jump as much as 5% next year. Fruits and vegetables are projected to advance 2.5%, cereal & bakery products 2.5% to 3%, and confections 3.5% to 4.0%.
Overall food prices in the United States this year, 2009, including food eaten at-home and away-from-home, are expected to rise between 2% and 3%, but will likely wind up near the lower end of that range according to The Food Institute which reviewed the latest food price outlook numbers from USDA’s Economic Research Service. The reason is that food prices have been running under year earlier levels in recent months when compared to a year ago – a trend that is certainly not likely to continue for an extended period.
While that inflation rate is less than half of 2008’s steep 5.5% hike in food prices, it not far out of touch with average annual increases over the past 10 to 15 years.
And when looking at food price inflation over four decades, the there has actually been a general stabilization. In the 1990s, food price inflation averaged just 2.8% annually compared to an 8.1% annual rate in the 1970s when soaring oil prices and a lifting of government control on food prices had a significant impact. In the decade ending next year, however, if the projections are realized, it will likely turn out that the annual inflation rate increases only slightly for the decade overall.