CHICAGO, Dec. 27 (UPI) -- U.S. food price inflation won't retreat in grocery stores until next year, despite current price plunges for agricultural commodities and fuel, experts say.
Even though prices for corn, wheat and soybeans have fallen dramatically since last summer, as has the price of the fuel used to transport the foods to market, it can take up to six months for commodity price spikes to work their way from the farm to store shelves, economists told Saturday's Chicago Tribune.
Ephraim Leibtag, an economist with the U.S. Department of Agriculture, expects the consumer price index's food inflation rate will fall to about 4 percent next year, an improvement over the 5 percent to 6 percent year-over-year rate expected for all of 2008. Even so, it's still above the long-term annual inflation rate of 2 percent to 3 percent.
Bill Lapp, principal economist at Advanced Economic Solutions, told the Tribune that current trends in the producer price index, which measures changes at the wholesale level, are still showing food price inflation as being greater than the price jumps seen in retail grocery prices.
"This suggests wholesale prices haven't been fully passed through (to consumers)," he said.
