WASHINGTON — Food retail inflation is expected to persist at slightly lower levels through 2012, according to a forecast this week from the U.S. Department of Agriculture.
The USDA projected food-cost increases at retail of about 3% to 4% in 2012, slightly down from a projected 3.5% to 4.5% this year. Prices at restaurants, expected to increase about 3% to 4% this year, are expected to increase less than that next year, about 2% to 3%.
"While many inflationary pressures that drove prices up in 2011 are not expected to intensify and may even decrease in 2012, retailers have been slow to pass on cost increases to date," the USDA explained in its report. "Price levels in 2012 will hinge significantly on weather conditions in the American Midwest during the remainder of July and into August and September 2011."