USDA predicts a 3.5-4.5% increase in retail food prices this year. The potential surge in prices follows a mere 0.8% increase during 2010, which marked the slowest rate of growth since 1962.
Conversely, 2011's predicted growth rate would be the fastest one-year growth rate since 1978, and the biggest since 2008's 5.5%. The higher costs shouldn't come as a surprise; USDA has noted the increase in several of its monthly forecasts for retail food inflation, and has predicted a 3-4% increase since last February.
Larger food manufacturers have been able to pass on some of the rising costs to consumers, but many grocery stores and food vendors have cut the volume of products slated for price increases as wallet-wary shoppers choose to purchase cheaper items and fewer staple goods, according to the report. Restaurant operators have struggled to cope with the same price increases as many consumers opt to eat at home, although Bureau of Labor Statistics data shows that grocery prices in September were 6.3% higher than a year ago, compared to an annual increase of only 2.6% for food eaten away from home.
