Iowa farmers may be feeding the world but it’s still costly to feed ourselves. A new report from the U.S. Department of Agriculture predicts Iowans shouldn’t expect their grocery bill to drop next year but grocery costs also shouldn’t climb, at least not much.
U.S.D.A. economist Ricky Volpe sayd, “It’s bad news in that prices are not going to be decreasing, but it’s good news in that consumers should not expect prices to increase with the same spike, with the same sharpness, that we saw in 2011. In 2012, we’re looking for food price inflation to continue, but we are projecting the overall rate of food price inflation to slow down in 2012 and to approach more historically normal rates.”
Volpe says items in the meat case will still be the most expensive. “Particularly beef and pork because they’ve seen extraordinary price inflation in 2011,” he says. “In fact, they’ve pretty much led the charge among food categories and we’re projecting beef and pork prices to remain at or near historic highs.”
As for the remainder of this year, Volpe says food staples like bread, noodles and cereal will take a bigger bite out of Iowans’ food budget. He says, “We’ve revised our forecast for cereals and bakery products, which includes bread, upwards to four-and-a-half percent over 2010 levels.”
The normal rate of inflation on food costs is between three- and four-percent.