Food prices unlikely to see relief: USDA's Schafer
WASHINGTON (Reuters) - The recent plunge in corn and soybean prices and the cost of fuel to transport products to stores will not bring relief to soaring U.S. food prices this year, Agriculture Secretary Ed Schafer told Reuters on Tuesday.
Food prices are forecast to rise by 5 percent this year, the largest annual increase since 1990. In its first estimate for 2009, the U.S. Agriculture Department said prices would rise by 4.5 percent, led by higher costs of red meat and poultry.
A broad range of commodities posted record high prices this year. Among them were corn and soybeans, but they have since declined more than 25 percent each as concerns over smaller crops due to a wet spring have dissipated. Oil also has slumped from a record high above $147 a barrel on July 11 to $113.
Despite the declines, Schafer said he did not anticipate prices going down from USDA's forecast for 2008.
"I don't think we're going to see a lessening here over the last six months of the year" of food prices from our forecast, Schafer said.
The cost of energy -- used to transport, package and process foods -- is still affecting food prices. Schafer said, even though energy prices have dropped.
"We haven't seen those prices reflected in the finished products yet," he said.
Americans spend more than $1 trillion a year on groceries, snacks, carry-out food and meals in restaurants. Farmers get 20 cents of the food dollar. The rest goes to processing, labor, transportation and distribution.
(Reporting by Christopher Doering; Editing by Walter Bagley)
