After hitting a record high in 2014, the supermarket price of pork will drop by 3.5 percent this year, the government said in updating its forecast for food price inflation. Hog farmers have expanded production at the same time the strong dollar discourages exports, so the pork supply for Americans is getting larger. It was the second month in a row that the USDA lowered its forecast for pork prices. In April, the forecast was for stable to slightly higher pork prices for the year, following the 9-percent gain of 2014.
Egg prices are forecast to rise by 3.5 percent this year, up 1 point from the previous estimate, due to the worst epidemic of avian influenza to ever hit U.S. poultry farms. The USDA has forecast a 5-percent drop in egg production this year. “On the other hand, low feed prices have had a mitigating effect on price inflation in the first part of 2015,” said the USDA. Retail egg prices are among the most volatile of food prices, usually peaking at the year-end holidays and falling in the first three months of the new year.
“Beef and veal prices fell for the first time since January 2014,” said the USDA. While down by 0.1 percent during May, they still are 10.1 percent higher than a year ago.
Overall, the USDA forecasts food prices will rise by 2.5 percent this year, compared to the 20-year average of a 2.6 percent annual increase. The department pared its forecast of price increases at the supermarket to 2.25 percent, down 0.25 points from May. Food-at-home accounts for 59 percent of consumer spending on food. The rest is spent on carry-out food, restaurant meals and institutional food.