The U.S.  Department of Agriculture is forecasting that supermarket prices, also known as “food at home,” will end this year with a decline of 0.5 percent, well below the 20-year historical average of a 2.5-percent increase.  USDA is forecasting supermarket prices overall to rise between a 1 and 2 percent next year for beef, pork, veal, eggs, poultry, and fresh fruit.

Consumers are eagerly reaping the benefits.  However, the bonanza is limited because commodity costs do not account for a large percentage of most packaged food.  Low food prices are not expected to have a large effect on discretionary spending, analysts say.

“For all commodities in agriculture there is a lot of product on hand, and prices, are depressed” John Newton, director of market intelligence at the Farm Bureau, said in a statement. Newton also said that the share of the food dollar that farmers and ranchers receive has fallen.  “Through the mid-70s, farmers received about one-third of consumer retail food expenditures for food eaten at home and away from home, on average.  Since then, that figure has decreased steadily and is now about 17 percent,” Newton said. Overall, net farm income is expected to hit its lowest level since 2009.

Food staples such as milk, eggs, frozen fruits and vegetables are in large supply as a result of increased production and decreased exports.  Two years ago, high prices for milk, pork, eggs, and other foods encouraged farmers to expand livestock operations and with lower costs to feed animals, some farmers waited to bring their livestock to market.  Today, the relative high value of the dollar makes U.S. products more expensive to export.  In addition, last year’s avian influenza crisis in the United States restricted export markets for poultry to a number of countries. Those factors and other are resulting in a surplus of certain types of food.

Currently, there are 1.24 billion pounds of cheese in refrigerated warehouses, which is the highest for the month of August since records began in 1921.  In addition, there is 1.52 billion pounds of frozen fruit in warehouses, and 1.31 billion pounds of frozen chicken and turkey, up 4 percent from a year ago.

Meanwhile, restaurant prices are on the rise because of such expenses as labor and rental costs.