The U.S. Department of Agriculture’s forecast for retail food prices indicated an inflation rate from three to four percent, according to a report released January 25.

“We’re still on track for a year of above average food inflation,” said Ricky Volpe, USDA food price economist.


Volpe said the increase in supermarket prices is mostly because of the 2012 drought and its impact on the cost of livestock feed. Volpe said it did little to drive up food costs during the actual year of the drought, but it will carry over to this year.

“Now here we are in 2013 and that’s where we’re going to see the impacts of these higher commodity prices because of the nature and the complexity of the food supply chain,” he said, indicating that the price of poultry, red meat, eggs and dairy products are all included in the projected increase. “These are all categories that rely heavily on feed corn as an input, and they feature minimal processing. Most of these foods are not very storable when they get to the level of the supermarkets, so we’re seeing these price impacts now.”