The mid-summer count of the U.S. cattle inventory was the largest in nine years, which means more beef production and lower beef prices in the supermarket for the second year in a row. “Lower beef prices are most likely adding pressure to lower pork prices,” say USDA economists in the monthly Food Price Outlook.
Beef prices fell 6.3 percent in 2016 and are forecast to decline 1 percent this year. Pork prices dropped 3.9 percent in 2015 and 4.1 percent in 2016. They are expected to hold steady this year, before increasing modestly next year. Beef prices also are expected to edge up in the new year. Beef and pork account for roughly 10 percent of grocery expenditures.
Supermarket prices for fresh fruit and fresh vegetables are modestly higher than a year ago, but the longer-term trend is downward, says the Food Price Outlook. The USDA forecasts that fresh fruit will show no year-over-year change from 2016 prices, and fresh vegetable prices for this year will average 1 percent less than in 2016. “Factors such as a stronger U.S. dollar, low oil prices and seasonal availability have placed downward pressure on retail fresh produce prices,” says the food inflation report.