WASHINGTON, Dec. 26, 2013 – USDA’s Economic Research Service (ERS) forecasts food price inflation will increase in 2014 to “a range closer to the historical norm,” the agency indicated in data released Monday. The food, food-at-home, and food-away-from-home consumer price index (CPI) are expected to increase 2.5 to 3.5 percent over 2013 levels, ERS reports.
Still, ERS says, 2014 inflationary prices will be moderate given the outlook for commodity prices, animal inventories and ongoing export trends.
If catastrophic drought returns to key agricultural areas, however, food prices could change, ERS warns.
Though final numbers will not be released until after the year has concluded, 2013 annual inflation will probably be lower than the 20-year historical average of 2.8. ERS predicts final 2013 food price increases of 1.25 to 1.75 percent. Grocery store food items “are on track for the fourth-lowest annual increase since at least 1980,” ERS says.
Decreased 2013 inflation is due to decreased exports and increased imports of many U.S. agricultural products, a stronger U.S. dollar, low energy price inflation and decreased prices for many commodities unaffected by the drought.
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