WASHINGTON - April 22, 2010 - Wholesale prices rose more than expected last month as food prices surged by the most in 26 years. But excluding food and energy, prices were nearly flat.

The Labor Department said the Producer Price Index rose by 0.7% in March, compared to analysts' forecasts of a 0.4% rise. A rise in gas prices also helped push up the index.

Still, there was little sign of budding inflation in the report. Excluding volatile food and energy costs, wholesale prices rose by 0.1%, matching analysts' expectations.

Food prices jumped by 2.4% in March, the most since January 1984. Vegetable prices soared by more than 49%, the most in 15 years. A cold snap wiped out much of Florida's tomato and other vegetable crops at the beginning of this year.

Gasoline prices rose 2.1%, the department said, the fifth rise in six months.

In the past year, wholesale prices are up 6%, with much of that increase driven by higher oil and other commodity prices. But the core index, which excludes food and energy, rose only 0.9%.

Consumers are facing smaller price increases, as many companies are reluctant to pass on higher costs. Last week, the Labor Department said the consumer price index rose only 0.1% in March. Excluding food and energy, the core consumer index was unchanged.