Department of Agriculture Forecast Food Price Hike
WASHINGTON -- In what marks the largest increase since 1990, the U.S. Department of Agriculture announced that food prices will increase by five percent this year, a direct result from rising costs of bread, cookies and other bakery products.
It is estimated that Americans spend more than $1 trillion a year on groceries, snacks, carry-out food and meals at restaurants. If the USDA's prediction is accurate, it will be the second year in a row of high food-price inflation. Before 2007, food prices, on average, had a slower rate increase than the overall U.S. inflation rate, reported The Los Angles Times.
"This year, we expect food prices to increase about 5 percent," Joe Glauber, USDA's chief economist, told the paper. While the USDA forecasted an overall 3.5 percent rise at the beginning of the year, The Los Angeles Times reported that prices of cereals and bakery products are forecast to zoom by 8 percent this year, up 2 percentage points from its initial forecast.
"That's what happens when wheat prices double in six months," Ephraim Leibtag, a USDA economist who tracks food prices, told the paper.
While cereals and bakery goods account for a larger share of food spending, Leibtag told the paper there will be sharp increases in eggs, fats and oils. Meat, poultry and fish prices, she said, will realize minor increases.
It is estimated that Americans spend more than $1 trillion a year on groceries, snacks, carry-out food and meals at restaurants. If the USDA's prediction is accurate, it will be the second year in a row of high food-price inflation. Before 2007, food prices, on average, had a slower rate increase than the overall U.S. inflation rate, reported The Los Angles Times.
"This year, we expect food prices to increase about 5 percent," Joe Glauber, USDA's chief economist, told the paper. While the USDA forecasted an overall 3.5 percent rise at the beginning of the year, The Los Angeles Times reported that prices of cereals and bakery products are forecast to zoom by 8 percent this year, up 2 percentage points from its initial forecast.
"That's what happens when wheat prices double in six months," Ephraim Leibtag, a USDA economist who tracks food prices, told the paper.
While cereals and bakery goods account for a larger share of food spending, Leibtag told the paper there will be sharp increases in eggs, fats and oils. Meat, poultry and fish prices, she said, will realize minor increases.