(Updates with fruit costs in second paragraph, USDA economist comment in third paragraph.)
Oct. 25 (Bloomberg) -- U.S. food prices will rise more than forecast last month, at the fastest pace since 2008, mostly because of a revised increase in the cost of fruit, the government said.
Consumers will pay 3.5 percent to 4.5 percent more for food this year than in 2010, up from a September forecast of 3 percent to 4 percent, the U.S. Department of Agriculture said today in a monthly report. The increase was the first by the USDA since February. Fresh-fruit prices will advance 3 percent to 4 percent, gaining a full percentage point from last month’s forecast.
“Cost pressures on wholesale- and retail-food prices due to higher food-commodity and energy prices, along with strengthening global food demand, have pushed inflation projections upward for 2011,” Richard Volpe, a USDA food- inflation economist, wrote in a note accompanying the report.
The Bureau of Labor Statistics earlier this month said consumer food costs rose 0.4 percent in September, capping a 12- month gain of 4.7 percent.
The USDA left its 2012 food-inflation projection unchanged at 2.5 percent to 3.5 percent. It lowered its estimate for egg costs for next year by a full percentage point from last month, to 2.5 percent to 3.5 percent, and raised its forecast for dairy products by a half-point, to 3.5 percent to 4.5 percent.
Corn futures in Chicago jumped 16 percent in the past year through yesterday, soybeans rose 2 percent, cattle climbed 21 percent and hogs gained 26 percent. Wheat has declined 19 percent this year, after rising 47 percent in 2010.
--Editors: Daniel Enoch, Steve Stroth.
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