The latest Consumer Price Index for Food indicates the rise in U.S. food prices over the past year has slowed considerably. And while prices will continue to move higher next year, they will do so at a slower rate than what we’ve seen in 2011. Meat prices, and beef in particular, should moderate in 2012 after posting large increases this year.

Overall, the report projects the “All Food” CPI to increase 2.5 to 3.5 percent in 2012 compared with 3.5 to 4.5 percent this year. The indices for food at home and food away from home each drop by a percentage point for next year, with projected increases of 2 percent and 3 percent respectively.

Food prices, and especially meat prices, rose considerably between 2010 and 2011, after relatively low food inflation between 2009 and 2010. The all-food CPI increased 0.8 percent between 2009 and 2010, the lowest food inflation rate since 1962. But as of October 2011, meat prices were up 7.7 percent from October 2010, while beef prices increased by 9.6 percent over the same period. Steak prices up were 8.4 percent and ground beef prices up 9.9 percent.

Pork prices increased  5.9 percent above last October’s level, according to USDA. Poultry are 2.8 percent above prices last year at this time, with chicken prices up 1.6 percent and other poultry prices, including turkey, up 7.3 percent. USDA analysts note that the beef and pork industries downsized inventories during the high price inflation of 2007 and 2008, and the supply of these commodities remains low relative to demand.

For 2012, the report projects meat prices to increase at a more moderate annual rate or 3.5 to 4.5 percent, and beef at 4.5 to 5.5 percent – still a significant increase, but less than that experienced this year.

View the CPI for Food summary from USDA.