Higher Beef & Pork Prices Contribute To Higher Food-At-Home Price Forecast

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April 07, 2011

Higher Beef & Pork Prices Contribute To Higher Food-At-Home Price Forecast

Largely the result of higher center-of-the plate items, particularly pork, USDA upped its food-at-home price projection for 2011 to 3.5% to 4.5%. If realized, that increase for food-at-home, would be the highest since 2008 when prices jumped 6.4%., reports The Food Institute in its latest weekly report.

Largely the result of higher center-of-the plate items, particularly pork, USDA upped its food-at-home price projection for 2011 to 3.5% to 4.5%. If realized, that increase for food-at-home, would be the highest since 2008 when prices jumped 6.4%., reports The Food Institute in its latest weekly report.

USDA notes that although food price inflation was relatively weak for most of 2009 and 2010, cost pressures on wholesale and retail food prices due to higher energy and food commodity prices, along with strengthening global food demand, have pushed inflation projections for 2011 upward.

Recent food commodity price increases, along with grocery store price increases over the past few months, have pushed forecasts for food-at-home inflation up. These are of course subject to change based on various factors, from weather to fuel costs. And indeed at the end of last week USDA also reported that farmers were prospectively planting more feed corn and wheat acreage this year. On the other hand, fuel prices are on the rise, with gasoline up a significant 19% during February compared to a year earlier.

However, for the time being, although cereal and bakery product prices declined 0.8% overall in 2010, higher wheat commodity costs should begin to affect cereal and bakery product prices over the next few months, causing prices to rise 3.5% to 4.5% overall in 2011. 
As commodity prices and input costs have risen over the past nine months, beef and pork prices are now significantly higher than in 2010. Increased inflation for beef and pork products is expected in the first half of 2011, as reflected in the forecasts - beef prices are now projected to increase 4.5% to 5.5% and pork prices 6% to 7% in 2011.

In 2010, dairy prices were up only 1.1% from 2009 , following a 6.4% decline from 2008 to 2009. However, higher projected prices for farm milk in 2011 will lead to increases of 4.5% to 5.5% for retail dairy product prices in 2011 based on current forecasts.

Following two years of little or no price inflation, retailers and consumers will  be faced with higher prices for a number of food products, but the atmosphere surrounding those changes will be changing constantly. The Food Institute will continue to monitor those changes and report what impact that will have on the food industry and consumer behavior. So be sure to check out the Food Institute at www.foodinstitute.com.
 

Largely the result of higher center-of-the plate items, particularly pork, USDA upped its food-at-home price projection for 2011 to 3.5% to 4.5%. If realized, that increase for food-at-home, would be the highest since 2008 when prices jumped 6.4%., reports The Food Institute in its latest weekly report.

USDA notes that although food price inflation was relatively weak for most of 2009 and 2010, cost pressures on wholesale and retail food prices due to higher energy and food commodity prices, along with strengthening global food demand, have pushed inflation projections for 2011 upward.

Recent food commodity price increases, along with grocery store price increases over the past few months, have pushed forecasts for food-at-home inflation up. These are of course subject to change based on various factors, from weather to fuel costs. And indeed at the end of last week USDA also reported that farmers were prospectively planting more feed corn and wheat acreage this year. On the other hand, fuel prices are on the rise, with gasoline up a significant 19% during February compared to a year earlier.

However, for the time being, although cereal and bakery product prices declined 0.8% overall in 2010, higher wheat commodity costs should begin to affect cereal and bakery product prices over the next few months, causing prices to rise 3.5% to 4.5% overall in 2011. 
As commodity prices and input costs have risen over the past nine months, beef and pork prices are now significantly higher than in 2010. Increased inflation for beef and pork products is expected in the first half of 2011, as reflected in the forecasts - beef prices are now projected to increase 4.5% to 5.5% and pork prices 6% to 7% in 2011.

In 2010, dairy prices were up only 1.1% from 2009 , following a 6.4% decline from 2008 to 2009. However, higher projected prices for farm milk in 2011 will lead to increases of 4.5% to 5.5% for retail dairy product prices in 2011 based on current forecasts.

Following two years of little or no price inflation, retailers and consumers will  be faced with higher prices for a number of food products, but the atmosphere surrounding those changes will be changing constantly. The Food Institute will continue to monitor those changes and report what impact that will have on the food industry and consumer behavior. So be sure to check out the Food Institute at www.foodinstitute.com.