USDA leaves forecasts for 2012 food inflation at 2.5% to 3.5%, 2013 food inflation at 3% to 4%.
--Drought's effect on retail food prices will mainly be felt next year
--USDA cuts inflation forecast for fish and seafood prices as world supplies expand
CHICAGO--The U.S. Department of Agriculture Friday left unchanged its forecasts for food inflation in 2012 and 2013, and said most of the impact of the country's drought on retail food prices will not occur until 2013.
The government projected prices for all food will climb 2.5% to 3.5% in 2012, unchanged from its July forecast. For 2013, the USDA projected the price of all food will climb 3% to 4%, unchanged from its forecast last month.
A severe drought across the Midwest has sent prices for corn, soybeans and wheat soaring. But it usually takes several months for higher commodity prices to cause higher retail prices, the USDA said.
"We're not going to see the majority of the impact until next year," Richard Volpe, a USDA economist who oversees the report, said in an interview.
The full extent of the drought and its effect on commodity prices isn't yet known, the USDA said, adding it will continue to update its food-price forecasts monthly.
The USDA cut its price inflation forecast for the subset of fish and seafood, projecting a rise of 3% to 4% for 2012, down from its last forecast of 4% to 5%. The change was due to world supplies expanding faster than expected.
The USDA didn't change any of its 2013 food inflation forecasts. But as higher commodity prices boost costs for animal feed, the USDA forecasts inflation will accelerate next year in the categories of beef and veal, pork, eggs and dairy products.
(END) Dow Jones Newswires
Source: Argentine Beef Packers S.A.
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