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Pork and beef prices are feeding food cost inflation

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Food prices will rise 3 to 4 percent this year, due in part to surging costs for pork and beef, the U.S. Department of Agriculture (USDA) said today.

The increase would be the most since 2008, Bloomberg said.

Though the overall estimate for food inflation was left unchanged in today’s report, the USDA said prices for meat, poultry and fish will jump 5 percent to 6 percent, led by beef, which may climb 8 percent, and pork, which could gain 7.5 percent. The beef estimate was increased by 2.5 percentage points from March and pork was raised 1 percentage point.

“I suspect when December arrives we will see increases of 4 to 6 percent” for the year in overall prices, said Bill Lapp, the president of Advanced Economic Solutions, an Omaha-based agricultural research company. “The pressure on food prices is clearly on the upside.”

Earlier this month, the U.S. Bureau of Labor Statistics said food costs rose 0.7 percent in March, capping a 2 percent gain for the first quarter. Cattle futures traded in Chicago were up 6.3 percent for the year through April 21, and hogs had increased 25 percent, on rising export demand. Crude oil prices surged 33 percent, Bloomberg said.

The USDA also raised its estimate for inflation for fats and oils by a full percentage point. Costs for fruits and vegetables will increase 3.5 percent to 4.5 percent, the department said, a half-percentage-point increase over previous estimates.

In the first quarter, meat and fish prices rose 3.2 percent, according to the Bureau of Labor Statistics. A fresh whole chicken cost $1.269 a pound at the end of March, slightly lower than $1.28 at the beginning of the year, while consumers paid about $2.715 for a pound of ground beef, a 14 percent increase.

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