Last year around this time, I was writing about what Americans spend on groceries. This was right during the middle of the drought.
I read today that drought has affected food prices less than expected. I’m thankful for this! However there has been a lot of talk of this in the news that last year’s drought would spike food prices (check here, here and here). The latest Consumer Price Index (CPI) for food shows food-price inflation has slowed during 2013, including prices for meat and poultry.
The CPI for all food increased by 1.4% from July 2012 to July 2013, and USDA’s Economic Research Service (ERS) projects an annual increase of 1.5 to 2.5% for all food and food-at-home prices. That would indicate a slightly smaller increase than we saw in 2012, and 2013 food-price inflation would drop below the 20-year historical average of 2.8%.
For meat & dairy, prices have moderated this year.
Beef
The 12-month increase for beef and veal prices through July was 1.3%. ERS projects an annual increase of 2 to 3% for 2013, compared with 6.4% last year and 10.2% during 2011.
Pork
Pork prices increased 1.9% from July 2012 to July 2013, and ERS projects an annual increase of 0 to 1% for 2013.
Poultry
Poultry prices increased 3.5% over the past 12 months, and ERS projects an annual increase of 3 to 4% this year.
Dairy
Dairy prices increased by 0.7% over the same 12-month period, and ERS projects an annual increase of 1 to 2% for 2013.
Do you see poultry prices and beef prices increasing more than dairy and pork because they are seen as "normal" goods compared to pork? What is making beef and chicken prices shoot up compared to pork?
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