A model is developed to forecast the food price component of the consumer price index published by the Bureau of Labor Statistics. The'model relates retail food prices to prices received by farmers and to wage rates in food marketing industries. The farm value and farm-retail spread of the market basket afe used as intermediate variables in transmitting till! effect of these variables to prices of food at home and all food. A system of equations structured along the lines of the USDA market basket is presented along with a set of reduced form forecasting equations.