4-3 IAT Food Prices

 Good News and Bad News on Consumer Costs.

There’s pretty good news - but also some bad news - on prices for consumers. The most recent consumer price index report shows stable food prices for Americans. American Farm Bureau Economist John Anderson explains what that means for food prices and farmers.  ”If you look at the food at home index which measures the price that people pay for the common items that they buy in a grocery store, that index is up just a little over 1% year after year. That is actually below what we would consider to be normal for food price inflation.” That is the good news. But Anderson says that with in the food sector there is a lot of variability. “We still see beef and poultry prices increasing compared to most other items. Pork prices were down quite a bit as were cereal prices, sweets and fats and oils. Beef prices continue to go up largely because supplies remain very tight. That has a lot to do with the  drought we had last summer, actually for 2 summers as far as the cattle industry is concerned because a lot of our plain states had a  terrible drought in 2011, actually it was probably worse than 2012 so those long run effects continue to  effect the supply of meat that is available and continues to pressure on prices. With poultry we seem to have very strong demand right now.”