The U.S. government increased forecasts for beef, pork and fresh vegetable retail prices, the Wall Street Journal reports.
But the government did not adjust the 2011 forecast for food inflation, which remained between 3 percent and 4 percent, according to the agriculture department. The agency's monthly analysis tracks retail prices and indicates inflationary pressures are moving toward the upper end of the range due to higher costs for energy and grain prices' increase during a 10-month rally.
"There just isn't a single major food category where prices aren't climbing," Michael Swanson, an economist at Wells Fargo, told the publication, noting he anticipates the Consumer Price Index for food will climb as much as 5.5 percent in 2011.
Retail prices for beef are projected to increase as much as 8 percent, more than the 5.5 percent forecast in March. Pork prices will increase as much as 7.5 percent, a half-point higher than last month's projection.
Increased commodity costs "could temporarily boost profits across the value chain," according to a note to clients from Janney Capital Markets.
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