What Goes Up, Must Go Up Less?

During February, retail food prices again held fairly steady compared to the prior month, according to the latest government data reported The Food Institute – and now are up only slightly from the beginning of the year.

During February, retail food prices again held fairly steady compared to the prior month, according to the latest government data reported The Food Institute – and now are up only slightly from the beginning of the year. The fifth consecutive monthly decline in fresh vegetable prices and lower dairy prices offset higher prices for cereals and bakery products. Even so, retail food prices as reflected by the Consumer Price Index food-at-home index were up 4.5% from a year earlier.

The index for food away from homerose 0.1 percent in February after a 0.4 percent increase in Januaryand has risen 3.1 percent over the last 12 months.

Meanwhile, on the wholesale side, prices inched down again last month and compared to a year earlier were up just 1.6% -- the smallest percentage since late 2009. A 2.8-percent drop in prices for dairy products led the February decline in the finished consumer foods index as well as dairy prices continue to move lower.

And as the accompanying graph from the Food Institute portrays, retail food price changes versus a year ago outweighed those at wholesale for the third consecutive month during February. Looking ahead, the Food Institute projects retail food prices will move lower versus year ago levels as well, although still at a premium to the wholesale food price comparison.

Overall retail food prices, based on current conditions, are still projected to rise between 2.5% and 3.5% this year.  Center of the plate items however will lead the pack however, with beef prices seen rising as much as 4.5% this year and seafood the same.   Thus consumers, may find it more economical to witch to lower priced pork and poultry, which are not seen rising as significantly this year.

Of course, we are not even through the first quarter of 2012 and many crops are just starting to be put in the ground, so much can happen and usually does, notes The Food Institute. To keep updated, don’t forget to turn to The Food Institute at www.foodinstitute.com and it weekly report.