Could Food Inflation Be Reignited This Year?

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Overall food prices are projected to rise less than 2008's 5.5% at a bit over 3% it could be impacted by production cuts and a stronger U.S. dollar.

While food inflation is projected to be under last year's 5.5% level it could be impacted by production cuts and a stronger U.S. dollar, according to Kenneth Zaslow, a senior analyst for BMO Capital Markets speaking at The Food Institute's webinar Where Are Food Prices Headed In 2009? (http://www.foodinstitute.com/foodprices.cfm) Reductions in production could "reignite inflationary pressures," noted Zaslow, pointing out that the recent slowdown in food inflation has been accelerated by declines in demand, and "trading down" by consumers.

Overall food prices are projected to rise 3% to 4.0%, noted Ephraim Leibtag, U.S. Department of Agriculture economist. Food-at-home prices however are seen rising between 2.5% and 3.5%, while food away-from-home is projected to rise between 3.5% and 4.5%. Center-of-the-plate protein items, such as beef pork and poultry are seen rising under 2008 levels, and dairy and egg prices are actually projected to decline this year after increasing at double-digit rates in 2008.

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The Food Institute is a nonprofit organization with a single purpose: providing information. The Food Institute strives to be the best "single source" for current, timely and relevant information about the food industry from "farm to fork." The association serves as a trusted source of information, providing balanced coverage of the issues. It delivers information through multiple media so that industry professionals worldwide can tap in when and how they choose. For more information, visit http://www.foodinstitute.com.

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Brian Todd
The Food Institute
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