Grocery shoppers will pay lower-than-expected prices for beef, poultry and dairy products, thanks to the strong dollar and larger meat production, said the monthly Food Price Outlook. For beef, the change in price would be dramatic — down by 2.5 percent this year after two years of steep increases.
The strong dollar makes U.S. exports more expensive in overseas markets and means a larger supply of meat and dairy for domestic consumption, said the USDA report. Overall, food prices are forecast for a 2 percent increase this year, well below the annual average of 2.6 percent.
Beef prices are 5.6 percent lower and poultry 3.1 percent lower than a year ago. The larger domestic supply, along with weak demand for beef, has pulled down prices. “Retail chicken price inflation has remained relatively low into 2016 partly due to an increase in broiler production,” said USDA. Dairy prices are 2 percent lower than a year ago, reflecting the slump in milk prices.
USDA estimates poultry prices will rise by 0.5 percent this year, compared to the usual 2.6 percent rise, and dairy will rise by 1.5 percent, below the 20-year average of 2.7 percent.