Food price inflation should be low this year, except when it comes to beef prices.
Even though farmers struggled to plant and harvest crops across the nation due to drought, the affect on consumers will be less than many feared, reports USDA’s Economic Research Service.
"The impact of the drought is looking like it is going to be less than was originally forecast and what that means is that right now we’re on track for a year of basically normal food price inflation. We’re forecasting a range of 2.5% to 3.5%," says Ricky Volpe, USDA-ERS economist.
Beef prices, however, will stay on the upward rise, due to shrinking domestic supply and increases in exports to other countries.
Volpe says that beef prices will continue on this path until cattle inventories start to expand to meet consumers’ demand. That won’t be seen until 2014 at the earliest.
Pork prices will remain mostly flat, as production is increasing much faster than beef, and some consumers are shifting away from pork products towards poultry products, which historically in the last few years have been relatively less expensive.