Retail Food Prices

Retail Food Prices

I’m KayDee Gilkey with the Northwest Farm and Ranch Report.
Retail food prices this year started off being higher than 2011, but during this year prices really never increased much at all, leaving them at about 2.5 percent higher than last year.

USDA Economist Ricky Volpe warns that the impact of 2012’s drought for much of the nation will be the cause of great food prices next year.

Volpe: “Because food prices have been flat, this means that we are still going to feel the impacts of the drought almost entirely in 2013. Now it does appear that we have seen some very preliminary affects here in the tail end of 2012 coming from the drought. We’ve seen recent price increases for beef, pork, for chicken, for fluid milk. These are all price increases that can all be attributed pretty safely to higher commodity prices that resulted from the drought. However, the U.S. food supply chain has many steps, there are a lot of contracts involved in prices and as a result we are going to see most of these affects for most of these food categories in 2013. That is why for 2013 we are looking at overall food price inflation to be 3 to 4 percent. Now the historical average for year over year price change for food prices is almost 3 percent -- 2.8 percent. Which means that even if we end up at the low end of our forecast, the low end of the range; due to the drought we are looking at another year of above average food price inflation.”

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