The Carter administration warned yesterday that the recent respite in food inflation may be ending, and predicted food prices will rise at a 10 percent annual rate this quarter, double their January-March pace.
The forecast, issued by the Council on Wage and Price Stability, also predicted cautiously that the rise in overall consumer prices "may be less" in this April-June quarter than the 18 percent annual rate of the January-March period, but declined to say how much.
Analysts said the end to the relative price holiday in supermarkets is expected to stem from a variety of factors, including increases in energy costs and in labor costs for processors and distributors. Farm prices still are low.
Economists also noted that the month-long voluntary price "freeze" that Esther Peterson, the president's consumer affairs adviser, persuaded supermarket chains to impose last month is ending.
Specialists said many of the large grocery chains are expected to boost prices more this month than they otherwise would have, to compensate for the freeze. Locally, several chains participated in the freeze.
The new predictions came as, separately, President Carter said yesterday he will veto any tax cut Congress passes this year unless the lawmakers can guarantee him that the fiscal 1981 budget will be balanced.
Sen. Edward M. Kennedy (Mass.), Carter's rival for the Democratic presidential nomination, also opposed a tax cut, agreeing that it would "only add to inflation" unless accompanied by other steps, such as a wage-price freeze. Kennedy said economic conditions now are "entirely different" from those in 1962 when his brother, the late president John F. Kennedy, proposed a major tax cut that most economists now view as successful.
Republican presidential hopeful John B. Anderson said he might favor a "temporary freeze" if prices charged by producers continue to escalate.
All three candidates spoke before a convention of newspaper editors.
The prediction by the wage-price council was not viewed as alarming. Overall food prices, restaurant as well as grocery, remained unchanged in January and February, while grocery prices actually declined at an average 3.7 percent annual rate.
Agriculture Department officials said yesterday that, because of the first-quarter respite in food price increases, they are not changing their earlier predictions that retail food prices will rise by 7 to 11 percent over the year.
The stability of food prices has been one of the few bright spots in the consumer price index in recent months. Their last big increase was in December, when they soared 1.4 percent.
The council predicted that retail prices of pork and eggs will continue to decline in the current quarter, thanks primarily to sharp increases in production, while poultry prices will remain at January-through-March levels. p
However, the agency said retail beef prices are expected to resume rising between April and June, mainly because of a cutback in marketing by feed-lot operators. Prices of sugar and sweets also will rise sharply.
Yesterday's report also showed that the so-called "middleman's spread" -- the difference between farm prices and supermarket prices -- was squeezed sharply in February for meats, eggs, fresh fruits and vegetables.
Administration economic strategists have been counting on continued moderation in food prices to be a bulwark of the anti-inflation effort, and analysts said yesterday's predictions would not necessarily upset these expectations.
White House economists still are hoping that energy prices and interest rates will moderate enough to slow consumer prices substantially later this year. However, most analysts expect a surge over the next three months.
In his speech to the editors' group yesterday, Kennedy repeated his assertions that the Carter administration's war on inflation is relying on "economic myths," including the notion that balancing the budget will help slow prices.
He charged that in moving toward conservative economic policies, Carter "has left behind the best traditions of the Democratic Party. Those traditions need not be left behind."
Agriculture Department figures show farm prices still depressed, particularly for cattle and hogs. Retail beef and pork prices also have remained stable and are well below levels of a year ago.