Beef prices are at record-high levels in the grocery store and will keep climbing, the government forecasts in its new Food Price Outlook. The USDA now estimates beef prices will rise by 6 percent this year, up by one-half point from the previous forecast. Beef prices soared by 12.1 percent throughout 2014, driven by high demand and an historically low number of cattle in the country. Lower feed prices allow producers to fatten cattle to higher weights, which delays marketing, and to rebuild their breeding herds rather than send animals to slaughter now, so supplies remain tight.
While beef prices are 10-percent higher than a year ago, pork prices are nearly 4-percent lower than the year-ago figure. The USDA forecasts pork prices to fall slightly this year – down 0.5 percent because hog farmers are expanding production and the strong dollar discourages pork exports, which means more pork in the supermarket.
Fresh fruit and vegetable prices are forecast to rise by a moderate 3 percent this year, in line with the 20-year average of 3.1 percent. The USDA cautions the four-year drought in California could have “long and lasting effects” on produce prices, but for now the strong dollar and lower petroleum prices help to hold down prices. California is home to one-third of the U.S. vegetable crop and two-thirds of the fruit and nut crops.
That’s a significant amount, but the country is a net importer of fruits, nuts and vegetables. Half of the fresh fruit and more than a quarter of fresh vegetables consumed by Americans are imported. So are nearly 40 percent of frozen vegetables, 15 percent of canned vegetables, more than one-third of fruit juice and canned fruit, and one-fifth of dried fruit. The imports, along with U.S. produce grown outside California, are a powerful, moderating force on the supply and price of fruits and vegetables.
During a teleconference sponsored by the nonprofit Chefs Collaborative, two produce industry leaders said California growers are likely to shield fruit and nut production from the drought as much as possible while scaling back row crops, such as melons or tomatoes. Fruits and nuts are perennial crops that offer the highest returns if they receive enough water. If water supplies become a persistent problem, said one of the executives, fruit and vegetable production will become a more prominent part of California agriculture as other crops and livestock dwindle in scale.
Since the 1960s, California farmers have increased their productivity per gallon of water by using water more efficiently and shifting to higher-revenue crops, such as fruit, vegetables and nuts, says the Pacific Institute. The amount of water used by farming has grown by a comparatively small amount during that time.