No Change in Forecast for Increase in Food Costs
By RON NIXON
NYTimes.com
August 24, 2012
WASHINGTON — The Agriculture Department said Friday that consumers could still expect higher food prices next year, but the expected 3 percent to 4 percent increase was unchanged from last month, even as extreme heat in the Farm Belt continued to reduce the grain harvest and increase feed prices for livestock.
“The data out this morning shows that nothing much has changed,” said Ephraim Leibtag, deputy director of research at the department’s Economic Research Service.
The prices of beef and veal will go up the most next year, the report said, almost entirely because of higher costs for feed, which is made from corn and other grains. Beef and veal prices are expected to increase 4 percent to 5 percent.
The most immediate impact of the drought will be seen this year in poultry prices, the government predicted.
Government forecasters reiterated their projection of a 3.5 percent to 4.5 percent jump in chicken and turkey prices this year. The prices are expected to rise a bit less next year, in the range of 3 percent to 4 percent, the government said.
The increase in feed prices has caused many cattle producers to sell off or cull their herds. Cattle sales are up nearly 30 percent over last year, said Sara Baker, a spokeswoman for Sageworks, a financial information company based in New York that tracks the sales.
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