Food Inflation at Home May Have Peaked

http://www.bloomberg.com/news/2012-01-04/u-s-food-inflation-at-home-may-have-peaked-usda-s-glauber-says.html

U.S. inflation for food at home may have peaked after crop prices fell for the first time in three years, the U.S. Department of Agriculture’s top economist said.

The Standard & Poor’s GSCI Agriculture Total Return (SPGCAGTR) Index of eight commodities dropped 16 percent last year, the biggest decline since 2008. Cocoa and sugar led the retreat for food items. Coffee, soybeans and wheat also declined.

World food prices tracked by the United Nations dropped for a fifth month in November, the longest decline in more than two years. Farmers will reap a record corn crop in 2012, and global inventories of wheat, corn and soybeans will be 3.2 percent more than projected in November, the U.S. government said Dec. 9.

The increase of about 6 percent for food prices at home last year was probably the peak and will return to more “normal” gains of 3 percent to 4 percent this year, Glauber said. Globally price inflation will slow “similarly” to the U.S., he said.