Food prices for basics such as beef, pork, and vegetables are expected to rise above other foodstuffs according to a new government report issued by the USDA. The USDA on April 25th came out with their production forecast for 2011, and in the report, several items are expected to rise in price much higher than the projected rate of inflation.
Beef and pork prices are expected to be much higher this year due to two primary factors in the market. As corn and other grains have risen much higher than inflation, and a combination of global famines and droughts have driven grain futures to new highs, many meat producers have culled their herds to help raise the price of meat, while cutting costs of feeding additional livestock.
Yet, in the USDA report, only a small portion is dedicated to grain prices and inflation, and these are the main sources that are leading to global turmoil over prices and shortages.
The forecast for overall food-price inflation held steady at 3% to 4%, the U.S. Department of Agriculture said in its monthly analysis of the federal government's consumer-price index for food, which tracks retail prices of everything from milk to cooking oil and steak. But within the report there are signs inflationary pressures are approaching the high end of that range, the result of higher energy costs and a 10-month rally in grain prices.
Retail beef prices are forecast to jump 7% to 8% in 2011, up from a March forecast of 4.5% to 5.5%. The USDA also projects retail pork prices to climb 6.5% to 7.5%, an increase of half a percentage point from the prior month. – Wall Street Journal
On top of these forecasts, retail outlets for produced food are charging prices much higher than the projected 3-7.5% given by the USDA. Recently, a price guide by the LDS canneries across the United States showed increases of 11-40% for many items and basic staples.
Food prices overall are rising because of inflation, and according to the USDA, primarily for basic items like beef, pork, and vegatables. However, the government's forecast for 2011 seems to be at least a year behind since rising prices of more than 7% have been showing up in grocer's shelves for nearly a year.
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