Inflation Outlook for Food Still Tame

The Agriculture Department is standing by its forecast for unusually tame food-price inflation this year but warned Monday that the broad rally in farm commodity prices since midsummer will take a bigger bite out of consumers' wallets next year.

In its monthly food-price inflation forecast released Monday, the USDA stuck with the prediction it first made in late August that the government's widely followed consumer-price index for food will rise between 0.5% and 1.5% this year, which would be the smallest increase since 1992.

The USDA also left unchanged its forecast for retail food prices to climb by a more typical rate of between 2% and 3% in 2011.

But Ephraim Leibtag, the USDA economist responsible for the forecast, said surging prices of commodities such as corn and wheat are increasing the odds that the 2011 food-inflation rate will be at the high end of his forecast range.

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