Get ready to pay more for groceries this year

Overall food prices in the U.S. are going to inch up between 2 and 3 percent this year, putting an added burden on household budgets.

The U.S. Department of Agriculture's Economic Research Service has said in report that both food-at-home (grocery store) and food-away-from-home (restaurant) prices are also forecast to increase 2 to 3 percent.

Although food price inflation was relatively weak for most of 2009 and 2010, higher food commodity and energy prices have recently exerted pressure on wholesale and retail food prices, the USDA's Food Price Outlook 2011 says.

Higher prices will push inflation toward the historical average inflation rate of 2 to 3 percent in 2011.

The report also adds: The all-food CPI increased 0.8 percent between 2009 and 2010, the lowest food inflation rate since 1962. Food-at-home prices increased by 0.3 percent—the lowest annual increase since 1967—with cereal and bakery prices declining 0.8 percent and processed fruit and vegetable prices dropping 1.3 percent, while food-away-from-home prices rose 1.3 percent in 2010, the lowest annual increase for restaurant prices since 1955.”

The report says beef prices fell 0.6 percent in December but are 6.1 percent above last December while steak prices are up 5.4 percent and ground beef prices up 6.2 percent. Poultry prices decreased 0.6 percent in December while fresh fruit prices increased 3.7 percent.

Cereal and bakery product prices were up 0.3 percent from November to December 2010 but are down 0.2 percent from last year at this time, the outlook says. Dairy prices were up 0.4 percent in December.