Food Institute Inflation Projection In Sync with USDA

Based on wholesale food price trends, The Food Institute projects retail food inflation will step up only slightly over the next few months. Since mid-2012, wholesale food price advances have consistently outweighed those at retail—one of the longest stretches this has happened in several years.

Based on wholesale food price trends, The Food Institute projects retail food inflation will step up only slightly over the next few months. Since mid-2012, wholesale food price advances have consistently outweighed those at retail—one of the longest stretches this has happened in several years. It appears retail prices will trend slightly higher but will likely still fall within the 1.5% to 2.5% range predicted by USDA’s Economic Research Service for 2013. Here are some projections on major food categories.

PORK -During July pork prices had the largest gains, increasing 1.7% in one month. Strong domestic and foreign demand coupled with higher-than-normal feed prices due to the 2012 drought have contributed to recent pork price inflation, reported USDA.

BEEF AND VEAL - Prices, already at record highs for many products, increased 0.5% from June to July. The historically low inventory of cattle in the United States is expected to result in sustained inflation and high prices for retail beef products through 2014.

POULTRY - One of the largest food categories to experience price declines from June to July is poultry. Poultry prices remain high on the year due to strong demand and high feed costs. However, poultry prices fell 0.7% from June to July, partly reflecting the strong supply responsiveness of broilers.

DAIRY - The 2013 milk production forecast is raised slightly in August from July to 202.1 billion pounds. The 2013 forecast is raised due to changes in second-quarter reported production. The 2014 milk production forecast remains unchanged from the July forecast at 204.5 billion pounds

COFFEE -  Wholesale prices moved higher but still remain under year earlier levels. Retail prices are following suit but in a slightly less dramatic fashion.