Food prices will rise about 2 percent in the near term, “substantially less” than increases caused by previous surges in farm-commodity costs, Agriculture Secretary Tom Vilsack said.
High crop prices don’t automatically raise food prices because commodity costs comprise less than 20 percent of every dollar a U.S. consumer spends on food, Vilsack said today in an interview with CNBC television. Still, some increases are inevitable as producers pass along higher expenses, he said.
Wheat, corn and soybean futures in Chicago are all up at least 15 percent this year on higher exports and tighter supplies than expected earlier this year. The U.S. Department of Agriculture on Oct. 25 forecast food inflation of 2 percent to 3 percent next year and estimated this year’s increase to be 0.5 percent to 1.5 percent.
Vilsack also said the U.S. is trying to increase trade with India and anticipates continued export opportunities with China.