Wednesday, July 25, 2012

Time to head to Costco

USDA predicts that food prices will rise 3 to 4 percent in 2013, up from 2.5 to 3.5 percent this year, in the department's first assessment (pdf) of the impact of the drought on food costs. Higher prices for meat, eggs and dairy products will lead the way. Those products are most sensitive to the increased costs of corn and soybeans for feed as well as the damage to pastures and rangeland.

The drought is expected to temporarily hold down prices for some products as producers reduce their herds. USDA economists now estimate that beef prices will increase 3.5 to 4.5 percent for this year rather than the 4 to 5 percent rise forecast in June.

Overall food prices rose 3.7 percent in 2011 and 0.8 percent in 2010.
Here's a breakdown of USDA's forecast for 2013:
  • Beef, up 4 to 5 percent
  • Pork, up 2.5 to 3.5 percent
  • Poultry, up 3 to 4 percent
  • Eggs, up 3 to 4 percent
  • Dairy, up 3.5 to 4.5 percent
  • Fruits and vegetables, up 2 to 3 percent
  • Cereals and bakery products, up 3 to 4 percent
by Philip Brasher, CQ Roll Call Staff

As an aside, there is nothing duller than a hearing on Dodd-Frank.

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