Food Inflation at Lowest Rate Since 1992

Recently released ERS/USDA  data show that, in 2010, the Consumer Price Index (CPI) for all food is projected to increase only 0.5 to 1.5 percent. Thats the lowest annual food inflation rate since 1992. Food-at-home (grocery store) prices are also forecast to increase 0.5 to 1.5 percent, while food-away-from-home (restaurant) prices are forecast to increase 1 to 2 percent.

ERS/USDA attributes the low food price inflation to economic activity that remains below pre-recession levels.

The all-food CPI increased 1.8 percent between 2008 and 2009. Food-at-home prices increased by 0.5 percentthe lowest annual increase since 1967with dairy prices declining 6.4 percent and fresh produce prices dropping 4.6 percent, while food-away-from-home prices rose 3.5 percent in 2009.

Data for July 2010 show the CPI for all food was unchanged from June to July 2010, decreased 0.1 percent from May to June 2010, and is now 0.9 percent above the July 2009 level. The food CPI has now returned to a positive annual growth rate, following 6 consecutive monthsSeptember 2009 to February 2010of annual declines in food prices (a first since 1959). The food-at-home CPI was also unchanged in July 2010 but is up 0.7 percent from last July, while the food-away-from-home index was up 0.1 percent in July 2010 and is 1.1 percent above last July. The all-items CPI was unchanged in July but is 1.2 percent above the July 2009 level.

Click here for more ERS data.