The USDA expects food prices to continue rising this year and next.
They say the effects of food is expected to rise 2.5-3.5% in 2012. Next year, prices are forecast to 2-4% in most categories with meat prices rising the most.
They say most of the impacts of the drought will not be seen until 2013 with the full extent yet unknown.
The Fed will not react to a rise in food prices but higher grocery bills will eat into consumer discretionary spending and dampen the mood in the US.
