An increase in agricultural commodity prices has fostered worries about an accompanying increase in food costs, but economists with the Texas AgriLife Extension Service said any overall jump will be "modest."

The U.S. Department of Agriculture has forecast that the consumer-price index for food will rise between 0.5% and 1.5% this year and between 2% and 3% for 2011. “Farm commodity prices fell sharply in 2009 and 2010 after reaching record levels in 2008,” said Jose G. Pena, AgriLife Extension economist-management. “However, food prices continued to rise in 2009 and 2010 even as farm commodity prices returned to 2007 levels.” Factors such as adverse weather, a weaker U.S. dollar, increased exports, higher crude-oil prices and heavy commodity contract buying have all contributed to increasing commodity prices.


“Still, on average, a 50% increase in the price received by the farmer results in only a 10% increase in the retail cost of food,” said Pena. “The recent upward movement in commodities pricing is expected to have little immediate effect on the prices of basic food items.”