By IAN BERRY And SCOTT KILMAN
The U.S. government raised its forecasts for retail prices of beef, pork and fresh vegetables but left its overall food-inflation forecast for 2011 unchanged.
The forecast for overall food-price inflation held steady at 3% to 4%, the U.S. Department of Agriculture said in its monthly analysis of the federal government’s consumer-price index for food, which tracks retail prices of everything from milk to cooking oil and steak. But within the report there are signs inflationary pressures are approaching the high end of that range, the result of higher energy costs and a 10-month rally in grain prices.
Retail beef prices are forecast to jump 7% to 8% in 2011, up from a March forecast of 4.5% to 5.5%. The USDA also projects retail pork prices to climb 6.5% to 7.5%, an increase of half a percentage point from the prior month.
While several categories within the CPI showed higher inflation, those categories are weighted and weren’t enough to push the overall food-inflation forecast beyond the 3% to 4% range.
Still, some private forecasters say retail food prices are climbing more sharply than the USDA is willing to forecast. Michael Swanson, an economist at Wells Fargo & Co. bank, said he expects the CPI for food to climb 4.5% to 5.5% in 2011.
“There just isn’t a single major food category where prices aren’t climbing,” he said.