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Food prices in the U.S. are rising

(February 23. 2010)—Grocery prices in January posted the largest one-month increase since September 2008, government data showed, signaling an end to last year’s food deflation.

The food at home index rose 0.4% last month, following a 0.2% increase in December, the U.S. Bureau of Labor Statistics said in its monthly consumer price report today.

Four of the six grocery store food groups had increases in January, led by dairy products, at 2.1%, and fruit and vegetables, at 1.3%, the bureau said.

Food prices are rising as the U.S. economy recovers from recession and prices for some raw commodities, such as milk and pigs, bounce back from slumps in recent years.

Wal-Mart Stores, Inc., on Feb. 18 said food deflation pressures are abating, while food processors and distributors have recently said they expect higher prices in 2010.

“There is a feeling… of inflation to come in beef, pork, poultry and dairy, Ken Spitler, Chief Operating Officer with foodservice company Sysco Corp., said during a Feb. 1 conference call.

Also on Feb. 18, Hormel Foods Corp., maker of Spam lunch meat and Dinty Moore stew, said it expects hog prices to continue rising this year.

Over the last 12 months, average food at home prices fell 2%, the Bureau of Labor Statistics said today. Fruit and vegetable prices were down 1.2% on average. The bureau is part of the U.S. Labor Department.

The Consumer Price Index, which includes food as well as housing, clothing and other categories, rose 0.2% in January on a seasonally-adjusted basis, the bureau said. Excluding food and energy, the CPI fell 0.1%.

By Bruce Blythe, Drovers Business Editor

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