Food price inflation rate eases as drought conditions improve

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Food costs were only marginally higher in August compared to the previous month and only one percent above prices from a year earlier as a better growing season benefits grocery shoppers.

Grocery bills for the month of August were only 0.2 percent higher than the previous month and one percent above August 2012 averages. The increase was recorded by the monthly USDA Consumer Price Index.

The current increases are subtle compared to the previous two years hindered by severe drought conditions across most of the country. Grocery food prices increased by an average of 4.8 percent in 2011 and 2.5 percent in 2012.

Notable increases this month were observed in the meat and vegetable categories. Meat prices were 1.3 percent higher than this time last year with beef and pork 1.6 percent and 1.7 percent higher respectively. The highest year-over-year gain in the meat aisle was observed in poultry prices, up 5.5 percent compared to August 2012. Fish and seafood items were also more expensive, selling for 3 percent more than a year ago.

Although higher than a year ago, beef prices decreased by 0.1 percent compared to July.

The new data has led the USDA Economic Research Service (ERS) to lower its yearly forecast of food price increases for the total amount spent at home. Most other increases for 2013 are steady between one and three percent.

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