Despite a 100 percent increase in corn prices due to higher ethanol demand, the overall impact on food prices is expected to be minimal, according to an agriculture department economist.
Ephraim Leibtag, USDA’s food price economist, says retail food prices are forecast to increase two to three percent this year. “That’s a little bit higher than what we’ve seen in the last couple years, but still within the range of what we’ve seen in the last ten years or so.”
Leibtag says corn prices do have an impact on the cost of food and feed, “but their share of the overall retail budget is relatively small.”
In fact, even with higher feed costs for cattle, beef may actually end up costing less this year because of higher supplies, and the same goes for pork. USDA is predicting about a one percent increase in retail chicken prices.
Listen to USDA report: Food Prices (3 min MP3)