US Food Prices to Increase at a Lower Rate Than Expected

21 Aug 2013 --- Food prices are predicted to increase anywhere between 1.5% and 2.5%, down from 3% to 4% as predicted in an earlier forecast, according to U.S. Department of Agriculture (USDA). Ricky Volpe, USDA economist says that the original increase was above average, but with the improving economy, lower gas prices and strengthening U.S. dollar, the decreasing shift has occurred.

“We are still looking at some food prices that are going to go up a little bit more than average and some that will go up less than average, but on the whole we are looking at moderate food price inflation for the year, which is good news especially given the initial outlook we had when the drought broke in July and August of 2012," he says.

A main product that has seen an increase due to the droughts has been beef due to an increase in feed costs for livestock. Current beef prices have hit record levels.

Volpe says that there will be a decrease in dairy products.

"We were initially forecasting pretty strong price increases for the year 2013, but it turns out that we saw most of the impacts of the drought at the end tail of 2012 so we're now on track for very moderate price increases for dairy for the foreseeable future, 1% to 2% for 2013," he says. 

Other products that are predicted to increase are poultry at 3% to 4% and eggs will go up 2% to 3% if not more.