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US food prices are expected to rise to their highest levels in eighteen years. High fuel prices, the weak dollar and more demand are set to drive the costs up by around five percent this year. Previous projections for increases were around three percent. This year will be the second year for high food prices and economists are predicting another year or two of higher food costs.

Prices are expected to outpace the rise in inflation in the coming year. The biggest increase, of nearly eight percent, will be in the price of cereals and baked goods. Because of higher prices for cereals, meat and poultry prices are expected to increase in 2009 due to the higher costs of animal feed.

Americans spend more than $1 trillion a year on groceries, snacks, carry-out food and meals at restaurants. While farmers receive 20 percent of that total, the rest goes to transportation, labor costs and distribution.