Grocery store prices for beef are at record highs and the government says they will rise again in the new year, although not as sharply as this year. In its monthly food inflation report, USDA said retail beef prices will zoom by 11.5 percent this year, partly due to drought in Texas and Oklahoma, and climb by 5 percent in 2015.
“Improved crop yields have allowed cattle producers to feed cattle longer and to hold cattle for expansion. However, signs of herd expansion are anecdotal at best,” said USDA, noting it takes six to 18 months for hog and cattle farmers to expand production.
Overall, food prices are estimated to rise by a moderate 3 percent this year and by 2.5 percent in 2015, in line with the 20-year average of 2.6 percent annual inflation. The forecast assumes normal weather. “In particular, the ongoing drought in California could potentially have large and lasting effects on fruit, vegetable, dairy, and egg prices, and drought conditions in Texas and Oklahoma could drive beef prices up even further,” said USDA.