News

Meat, seafood prices soaring on drought and disease

Meat, seafood prices soaring on drought and disease

FOOD COSTS:Wholesale beef prices are forecast to jump by 8 percent to 9 percent in 2014, although rising imports are helping to offset some of the decline in domestic supplies. Photo: clipart.com

By Ros Krasny

WASHINGTON (Reuters) – Overall U.S. food inflation will remain near the historic norm in 2014, even as prices for meat and seafood are pushed higher by disease and widespread drought, the U.S. Department of Agriculture said on Friday.

Prices for shelf-stable and processed items made by companies such as General Mills and Kraft Foods Group are relatively flat.

“It appears that supermarkets are maintaining minimal price inflation on packaged food products, possibly in an effort to keep prices competitive in light of rising cost pressures for most perishable items,” the USDA said.

But drought conditions in California and other states could further drive up prices of fresh produce and beef, the USDA warned.

The agency forecast wholesale pork prices to jump by 10 percent to 11 percent in 2014, hurt by declining supplies after a virus has killed some 7 million piglets in the past year.

Wholesale beef prices are forecast to jump by 8 percent to 9 percent in 2014, although rising imports are helping to offset some of the decline in domestic supplies.

Food inflation, which includes items bought in grocery stores and in restaurants, is seen at 2.5 percent to 3.5 percent this year and then subsiding to 2 percent to 3 percent in 2015, the USDA said in its first forecast for the new year. Since 1990, grocery store prices have risen by an average of 2.8 percent per year.

The agency noted a recent jump in vegetable prices but said it was too soon to tie the move to the severe drought in California, the largest U.S. grower of fruits and vegetables.

“The ongoing drought in California could potentially have large and lasting effects on fruit, vegetable, dairy and egg prices, and drought conditions in Texas and Oklahoma could drive beef prices up even further,” the USDA said.

Fresh fruit prices have risen 5.8 percent in the year through June compared with a year-ago, though prices fell 4.1 percent in June, reflecting a decline in citrus prices and a seasonal shift to summer fruits.

The latest weekly drought monitor from the National Oceanic and Atmospheric Administration shows much of California in an extreme or exceptional drought, the two most severe categories. Pockets of Texas are also in exceptional drought.

U.S. fish and seafood prices were forecast to rise by 3.5 percent to 4.5 percent this year, up from last month’s forecast of a 2.5 percent to 3.5 percent gain.

“In general, fish and seafood prices have been climbing due to decreased supplies of certain species and increased consumer demand, as other meats have become more expensive,” the USDA said.

(Reporting by Ros Krasny; Editing by Bill Trott and Leslie Adler)

Recent Headlines

3 hours ago in National

Takata recall could more than double in size

takata16125303396828

Tens of millions of air bag inflators could be added to what is already the biggest auto recall in American history.

4 hours ago in Sports

Deflategate: Brady gets more time

tombrady276076991807

Lawyers for the New England Patriots quarterback have been given another two weeks to appeal his "Deflategate" suspension.

4 hours ago in Sports

Kentucky Bourbon Trail offers a lesson for reviving racing’s fans

derby16124571363511

Some of the best-known farms in Kentucky's scenic horse country are borrowing from another of the state's contributions to the good life — bourbon whiskey distilleries — in an effort to win new recruits to an aging and shrinking fan base.

4 hours ago in National

School safety: Drops in bullying, violent crime on campus

schoolsafety16124794280762

The latest government snapshot of school crime paints a picture of safer schools, with declines in violent crime, bullying and harassment because of sexual orientation.

4 hours ago in National, World

U.S. gathers allies on next steps in Islamic State fight

isisREUTERS

The United States gathered defense ministers from 11 other countries for talks on Wednesday about ways to strengthen the campaign against Islamic State, a day after a U.S. Navy SEAL was killed in Iraq during an attack by the militant group.