The Food Institute reports that beef prices are running over nine percent above year ago levels with steak prices up six percent and ground beef prices up about 11%., based on Department of Agriculture data.
The Food Institute reports that beef prices are running over nine percent above year ago levels with steak prices up six percent and ground beef prices up about 11%., based on Department of Agriculture data. Pork prices meanwhile are seven percent above last July’s level. Both are higher due to much greater input costs, particularly feed corn which has nearly doubled in price. The beef and pork industries also downsized their inventories during the high price inflation of 2007-08, and the supply of these commodities remains low relative to demand.
As a result, USDA projects that beef prices will increase seven to eight percent and pork prices 6.5% to 7.5% in 2011. Beef and Pork prices are projected to increase further in 2012, albeit at lower rates of 3.4% to 4.5%, and 4.5% to 5.5%, respectively. If realized that could mean red meat price increases in excess of 10% over a two-year period. And that is significant considering that the average household spends about $400 a year on these two meat items – more than 10% of their annual food expenditures based on Food Institute analysis of government expenditure data.
In 2011, the Consumer Price Index for all food is projected to increase three to four perecent. Food-at-home or grocery store prices are forecast to rise 3.5% to 4.5% or over $170 per household according to The Food Institute, while food-away-from-home aka restaurant prices are forecast to increase three to four percent.
For 2012, food price inflation is expected to abate from 2011 levels but is projected to be slightly above the historical average for the past two decades. The all-food CPI is projected to increase 2.5% to 3.5% over 2011 levels with food-at-home prices increasing three to four percent as much $160-$170 per household according to Food Institute projections and food-away-from-home prices increasing two to three percent.
Food commodity and energy price increases over the past year, combined with a weak U.S. dollar, have caused most of the recent increases in grocery store prices. The all-items CPI was up 0.1% in July and is 3.6% above the July 2010 level.
The Food Institute will continue to monitor these changes and their impact on the food industry as well as consumers. Check out the Food Institute at www.foodinstitute.com.