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The US Department of Agriculture (USDA) says that it expects retail food prices to increase as much as 3.5 percent this year, a slight increase from the 3.4 percent that retail food prices increased last year. The reason – increased energy costs. However, while the USDA numbers do take into account the impact of Hurricane Katrina, they do not factor in Hurricane Rita.

Fresh fruit and vegetable prices are up more than 6 percent for the year, the biggest increase in food categories; cereal and baked goods were up 1.4 percent. Meat prices were even, and dairy prices were down.
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