The Consumer Price Index (CPI) in 2011 for all food is projected by USDA to increase 3.5 to 4.5 percent. Food-at-home (grocery store) prices are forecast to rise 4 to 5 percent, while food-away-from-home (restaurant) prices are forecast to increase 3 to 4 percent. Although food price inflation was relatively weak for most of 2009 and 2010, cost pressures on wholesale and retail food prices because of higher food commodity and energy prices, along with strengthening global food demand, have pushed inflation projections upward for 2011, according to USDA.
For 2012, food price inflation is expected to abate from 2011 levels but is projected to be slightly above the historical average for the past two decades. The all-food CPI is projected to increase 2.5 to 3.5 percent over 2011 levels, with food-at-home prices increasing 3 to 4 percent and food-away-from-home prices increasing 2 to 3 percent. While many inflationary pressures that drove prices up in 2011 are not expected to intensify and may even decrease in 2012, retailers have been slow to pass on cost increases to date. Price levels in 2012 will hinge significantly on several macroeconomic factors such as weather conditions, fuel prices, and the value of the U.S. dollar.
The CPI for chicken is projected by USDA to increase 2.5 to 3.5 percent in 2011 and 3.0 to 4.0 percent in 2012.
