The big increase in food prices forecast for next year by the US Department of Agriculture (USDA) and private economists may well be a time bomb ticking away amid efforts by the new Reagan administration to curb inflation, says James Howell, senior vice-president and chief economist of the First National Bank of Boston.
In 1981, the USDA forecast Nov. 19, food prices will rise 12.2 percent -- the largest increase since 1974. This was no surprise to Mr. Howell and other economists. "For some time we have been telling our big bank customers that we're going to have very rough sledding ahead next year on food prices," Howell says. "And there is very little that any administration can do about it because the basic problem is supply.
Pork is one of the items that will jump in price, says the USDA's World Food and Agricultural Outlook and Situation Board, by some 27 percent overall.
Jason Benderly, an agricultural economist with the Washington Analysis Corporation, a private inflation forecasting firm, says: "Basically, meat prices will be up during the second and third quarters of next year" due to a supply drop.
But he stresses that the overall inflation rate in 1981 is expected to be around 9 percent, compared with 13 percent for 1980.