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Food price inflation could top five percent

Grocery store prices could top last year by as much as five percent, according to Ricky Volpe, a food price economist at the USDA.

“We are seeing a sharp increase in food prices,” said Volpe, in an interview provided by the USDA.

Until recently, Volpe projected a 3.5 percent to 4.5 percent jump. Specifically, Volpe says the late fruit harvest has resulted in expectations for fresh fruit prices to rise three to four-percent.

“This month, due to the late harvesting of a lot of fruit crops in California and in Florida, we’ve revised our forecast for the fresh fruit index upwards, and that was sort of a tipping point,” said Volpe. Additionally, beef prices could average as much as nine percent higher, and pork could be up 7.5 percent.

Volpe expects a break in 2012. Prices will continue to increase, but not at the same rate as this year.

“Right now we’re looking forward to a decrease in price inflation, for prices to start moving more how they have in the last twenty years, in a more historically normal rate,” said Volpe. “The all-food index is expected to increase 2.5 percent to 3.5 percent over 2011 levels, and food-at-home 3 percent to 4 percent.”

Volpe cautions that over the next 14 months, weather and economic factors could change that forecast quite a bit.