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USDA raises 2020 food price forecast

The USDA has raised its food price forecast for the year to between two and three percent.  USDA economist Giana Short initially expected food costs to rise as little as half of a percent, but, “We’re now expecting those prices to increase between two and three percent.”

Short says the food inflation forecast had to be adjusted because of some price hikes during April that had not jumped that much in decades.  Short says most of those April price jumps came from meat products when demand shifted from restaurants and foodservice to retail during the COVID-19 lockdown.  She says the April price changes were enough to double the previous food price inflation forecast for the whole year.

Short says if food prices rise more than three percent, “that would be the highest since 2011.” That’s when prices went up almost five percent.

USDA says prices in 18 of 22 categories were revised upward.  They say beef prices are up between three and four percent, but eggs are up nearly nine percent.

USDA’s Economic Research Service analyzes the current index level for food, examines changes in the Consumer Price Index for food, and uses that data to forecast food price changes for the next 12-18 months. USDA’s Economic Research Service analyzes the current index level for food, examines changes in the Consumer Price Index for food, and uses that data to forecast food price changes for the next 12-18 months.

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