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The US Department of Agriculture (USDA) expects the Consumer Price Index to rise by 2 to 3% in 2011, ending a period of near-stagnant food price inflation over the past two years, according to FoodNavigator-US.com.

The higher food commodity and energy prices were behind the expected rise in prices, and the impact is likely to be even greater for meat and dairy prices, which were hit by higher feed costs in 2010, the report said.

The USDA said it is important to note that the United States is only just emerging from a period of exceptionally low food prices, with the consumer price index having only recently returned to positive growth.

The food consumer price index saw six consecutive months of annual declines in food prices from September 2009 to February 2010 – a first since 1959, according to the USDA.

“Although food price inflation was relatively weak for most of 2009 and 2010, higher food commodity and energy prices have recently exerted pressure on wholesale and retail food prices,” the agency said. “Hence, higher prices are projected to push inflation toward the historical average inflation rate of 2 to 3% in 2011.”

Several major food manufacturers announced their intention to raise prices on the back of stronger commodity costs toward the end of last year, expected to impact this year’s Consumer Price Index.

For all food, the Consumer Price Index increased 0.8% between 2009 and 2010, the lowest food inflation rate since 1962, the agency said, and food prices for foods consumed at home increased by 0.3%, the lowest annual increase since 1967.

While prices for cereal, fresh fruit and carbonated drink prices fell, beef prices were 6.1% up on the previous year, pork prices were 11.2% above the previous December’s level, and dairy prices rose 3.7% in the same period. – Source: FoodNavigator-US.com

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