U.S.D.A. sees higher food costs

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WASHINGTON — The Consumer Price Index (C.P.I.) for all food is projected to increase 1.5% to 2.5% during 2009, according to a Dec. 24 update from the Economic Research Service of the U.S. Department of Agriculture. The projected increase reflects lower commodity and energy costs combined with weaker domestic and global economies to pull inflation down from 2008 levels, the U.S.D.A. noted.

The all food C.P.I. increased 5.5% between 2007 and 2008, the highest annual increase since 1990, led by a 14% increase in eggs, a 13.8% gain in fats and oils, and a 10.2% increase in cereals and bakery products.

Looking ahead, the 2010 all food inflation index was left at 3% to 4%, unchanged from a Nov. 25 forecast, the U.S.D.A. said.

Breaking all food down further, the U.S.D.A. forecast food-at-home prices to increase 0.5% to 1.5% during 2009, while the 2010 forecast calls for an increase of 2.5% to 3.5%. Food-away-from-home prices are forecast to increase 3% to 4% in 2009 and 3.5% to 4.5% in 2010, the U.S.D.A. added.

The December 2009 C.P.I. will be released by the Bureau of Labor Statistics on Jan. 15, 2010.

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