Food inflation stabilizes, weather is worry for 2015
Record beef and pork prices are pulling up the prices of seafood as consumers look for lower-priced protein, says the government in an update of the food price outlook. Overall, food prices are forecast to rise by 3 percent this year, roughly in line with the annual average of 2.8 percent since 1990. The Agriculture Department says pork prices are up by 12 percent since mid-2013 and it expects an increase of 6 percent for this calendar year. Beef prices also are forecast to rise 6 percent and seafood by 4 percent. Despite the California drought, fruit and vegetable prices are expected to rise by a modest 3 percent this year.
In its first forecast for 2015, USDA sees a food price increase of 2.5 percent, with meat prices moderating although still affected by drought in cattle-producing regions of Texas and Oklahoma and by continuing impact of the Porcine Epidemic Diarrhea Virus on hog herds. USDA’s cautioned that severe weather could alter the outlook. “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’s Economic Research Service.