Cattle prices are stronger than expected this year but they they are likely to run below 2017 levels, with the result that retail beef prices rise modestly, at most, said the monthly Food Price Outlook. The United States is headed for the third year in a row of lower than average food inflation—0.5 percent compared to the 20-year average of 2.1 percent annually.
“Lower prices are earlier stages of production are likely to place downward pressure on retail beef and veal prices,” said USDA economists in the monthly report. They forecast a price increase of 1.5 percent this year and 2 percent in 2019. The long-term average for beef and veal is an annual increase of 4.1 percent. Americans spend 3.4 cents of each food $1 on beef and veal.
This year’s price increases are not expected to offset the declines of 2016 and 2017, with the result that this year’s price levels will still be lower than they were in 2015. The USDA forecasts an overall increase in grocery prices of 0.5 percent this year and 1.5 percent in 2019.