Grain Deficit Unlikely To Boost Food Prices

Dangerously low grain supplies and a 14 percent increase in grain prices over the past month aren’t enough to ignite a brush fire under food prices, the Agriculture Department’s chief economist said.

“People who translate that into scarcity or unavailability of food later in this year, or extraordinarily high food prices, are making a mistake,” USDA’s Keith Collins said in an interview. “I just don’t see that on the horizon at all.”

Collins raised his outlook for retail food price increases to 2.5 percent for all of 1996, up from February’s forecast of 2.2 percent, partly on a smaller hog herd.

Even so, that’s below the average 2.9 percent annual increase between 1990 and 1995.