USDA'S 2009 food price increase forecast at 4-5 percent.

Higher meat prices, driven by escalating grain prices, will fuel an increase of 4 to 5 percent in U.S. food prices in 2009, the third consecutive year of large increases, USDA forecast last week. Food prices are estimated to rise by 5 percent this year, the largest annual increase since 1990. They rose by 4 percent in 2007.

In its first estimate for 2009, USDA said food prices would be led by red meat and poultry, which account for 10 percent of food spending. Beef prices will rise by 6.5 percent, it estimated, and pork and poultry by 5.5 percent. USDA economist Ephraim Leibtag, who prepared the forecast, said higher feed costs "will impact the meat industry, supplies and production will tighten, and prices will rise."

For this year, the biggest price increases are forecast for eggs, up 14 percent, cereals and bakery products, up 9.5 percent, and fats and oils, up 12 percent. In that group, cereals and bakery products are the largest component of the food basket, 7.4 percent of overall spending. All would moderate in 2009, rising at 4 percent or less.

The USDA also sees the food-inflation rate slowing slightly from this year. The agency expects the food consumer-price index to climb between 4.5 percent and 5.5 percent in 2008, which would be the highest food-inflation rate since 1990. That is despite the Bureau of Labor Statistics report last week that its food-price index jumped 6.8 percent during the first six months of this year at a seasonally adjusted annualized rate.

While prices have been rising in the United Stats and Europe, the biggest increases are being felt in Asia, and countries like India and Vietnam already have to deal with double-digit inflation. Sharp rises in global food and oil prices are now spilling over into wages and broader measures of inflation across Asia, as the Asian Development Bank noted in a report released Tuesday.

Higher inflation in Asia is also starting to contribute to higher prices in the United States. According to the Labor Department, prices for imports from Pacific Rim countries--mostly Asian goods--rose 2.7 percent in the 12 months through June, after falling 1.4 percent in the preceding 12 months.

Asia's central bankers, who are preparing for their annual gathering July 28 in Shanghai, have been unable to develop a united response to deal with the worst inflation threat in at least a decade. That is because most central banks in Asia have been reluctant to give up any of their economic independence or challenge the United States by coordinating their monetary and currency policies, even as they fret about rising prices.