WASHINGTON – U.S. Department of Agriculture economist Ricky Volpe has been predicting some sharp increases in food prices this year, but he’s eating crow. In his food inflation prices report this month, Volpe changed his predictions on food price increases. Food price inflation for dairy products, and cereal and bakery goods, will be much lower than he predicted. He’s revised the dairy predictions from 3.5 to 4.5 percent to 2.5 to 3.5 percent, which is close to normal. The impact of the drought occurred at the end of last year and perhaps early this year, he said. Cereal and bakery goods generally make up much of the consumers’ food buying but inflationary pressures have moderated, he said. Forecasts originally set for food price inflation from 2.5 to 3.5 percent this year to 2 to 3 percent, he said. “Even though gasoline and commodity pricies can be volatile, food prices tend to be stable year in, year out,” Volpe said. However, he’s sticking to his original prediction for significant fruit and vegetable price hikes this year. He said that the sharp increase for fruits and vegetables is more of a correction. Because prices were so low over the previous two years, when you look the average over a couple of years, this year’s increase looks worse than it actually is, he said.
Monday, April 29, 5 p.m.
