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Year-on-year food inflation is highest since 2008

Pushed by high meat prices, the Food Price Index will surge by 3.5% this year, its largest increase since the 5.5% rise in 2008, said the USDA on Tuesday.

The index compares the average price increase for the current year with the average increase for the preceding year.

Food prices typically rise about 2.4% a year.

“Forecast ranges for beef and veal, pork, poultry, and fish and seafood were all revised upward this month,” said the USDA.

Beef prices are up by 9.5% this year, pork by 8.5%, poultry by 5%, and fish by 5%. In each category, the increases were at least twice as large as usual.

“Prices have been driven up by strong domestic and international demand, labor shortages, supply chain disruptions, and high feed and other input costs,” said the USDA. “Concentration and capacity constraints within the meat industry could also affect prices.”

This would be the second year in a row of high food inflation. Last year, when the pandemic struck the country, food prices rose by an average of 3.4%, with meat as the leading factor.

Americans spend 14¢ of the consumer dollar on food.

The widely watched Consumer Price Index calculates inflation by comparing prices in the current month with the same month a year earlier, a more dynamic method than the USDA’s approach of looking at average increases for the entire year.

On Dec. 10, the CPI showed a 6.1% increase in food prices from 12 months earlier.

The monthly Food Price Index is available here.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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