USDA Continues to Estimate Higher Consumer Meat Prices
USDA continues to increase its forecasts for food price inflation for various grocery store items, led by beef and pork prices, but so far it has not raised the overall outlook for all foods, grocery store or restaurant prices for 2021 or 2022. For 2021, USDA expects all food prices to increase 3% to 4%, grocery store prices to rise 2.5% to 3.5% and restaurant prices to jump 4% to 5% -- all unchanged from the previous outlook.
For 2022, USDA still expects higher food prices for consumers compared with 2021, but the rate of increase is seen easing. All food prices are forecast to rise 2% to 3% in 2022, while grocery store prices are projected to increase 1.5% to 2.5% and restaurant prices are forecast to increase 3% to 4%. All of these levels for 2022 are steady with prior forecasts.
Beef and veal prices were raised for the tenth straight month, up 9.0% to 10.0% from 2020 levels. For 2022, USDA forecasts beef/veal price will increase another 2.0% to 3.0%.
Pork prices increased for the ninth straight month, up 8.0% to 9.0% compared to last year, and are forecast to increase another 2.0% to 3.0% for 2022.
Poultry prices are now expected to increase 4.5% to 5.5% versus 2020. This was the third straight month for an increase in poultry prices. For 2022, USDA forecasts poultry prices will rise another 1.0% to 2.0%.
USDA’s explanation for the higher prices for meats has not changed. It says, “Prices have been driven up by strong domestic and international demand, labor shortages, supply chain disruptions and high feed and other input costs. Concentration and capacity constraints within the meat industry could also affect prices.”
Bottom line: USDA’s forecast range for overall food price inflation still falls within the increases that have been seen so far this year in all three of the “headline” categories. The December data that will be released in January will provide the complete picture for 2021 food price inflation, and that could result in the “final” numbers being toward the upper end of USDA’s current forecast ranges. With this year nearly complete, attention will turn to 2022 prices. USDA’s recent history has been to gradually adjust those prices over the course of the year.
Read more of today's news from Pro Farmer's Evening Report.
