Source  MEATINGPLACE.COM, 6/15/09

Consumers will pay more for their food in 2009 than in past years, but the higher tab will be less than the jump seen at cash registers last year, a USDA economist said last week.

"Prices on average at grocery stores and restaurants are predicted to increase above the historical average, but nowhere near where they were in 2008," said Ephraim Leibtag, an economist in the food markets branch of USDA's food economics division.

The consumer price index for food is expected to rise between 3 percent and 4 percent in 2009, compared with a typical annual increase of 2 percent to 3 percent over the past decade, Leibtag said. It rose 5.5 percent in 2008.

The cost of food consumed away from home is expected to rise 3.5 percent to 4.5 percent in 2009, while both beef and pork prices are projected to rise 1.5 percent to 2.5 percent, and the price of poultry is expected to increase 2 percent to 3 percent.

Among the culprits behind 2008's spike in prices were higher costs of commodities including corn, wheat and soybeans; higher energy and transportation costs; and increased U.S. exports due to a weaker U.S. dollar and growing global demand, said Leibtag, speaking on a conference call to clients of Janney Montgomery Scott.

Since last year, food commodity costs have come down from the summer's highs, energy prices are also down, and domestic and global demand have weakened, Leibtag said. While food commodity prices are down 22 percent from their 2008 peak, they are still up 38 percent since January 2006, he noted.

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