News

Meat, seafood prices soaring on drought and disease

Meat, seafood prices soaring on drought and disease

FOOD COSTS:Wholesale beef prices are forecast to jump by 8 percent to 9 percent in 2014, although rising imports are helping to offset some of the decline in domestic supplies. Photo: clipart.com

By Ros Krasny

WASHINGTON (Reuters) – Overall U.S. food inflation will remain near the historic norm in 2014, even as prices for meat and seafood are pushed higher by disease and widespread drought, the U.S. Department of Agriculture said on Friday.

Prices for shelf-stable and processed items made by companies such as General Mills and Kraft Foods Group are relatively flat.

“It appears that supermarkets are maintaining minimal price inflation on packaged food products, possibly in an effort to keep prices competitive in light of rising cost pressures for most perishable items,” the USDA said.

But drought conditions in California and other states could further drive up prices of fresh produce and beef, the USDA warned.

The agency forecast wholesale pork prices to jump by 10 percent to 11 percent in 2014, hurt by declining supplies after a virus has killed some 7 million piglets in the past year.

Wholesale beef prices are forecast to jump by 8 percent to 9 percent in 2014, although rising imports are helping to offset some of the decline in domestic supplies.

Food inflation, which includes items bought in grocery stores and in restaurants, is seen at 2.5 percent to 3.5 percent this year and then subsiding to 2 percent to 3 percent in 2015, the USDA said in its first forecast for the new year. Since 1990, grocery store prices have risen by an average of 2.8 percent per year.

The agency noted a recent jump in vegetable prices but said it was too soon to tie the move to the severe drought in California, the largest U.S. grower of fruits and vegetables.

“The ongoing drought in California could potentially have large and lasting effects on fruit, vegetable, dairy and egg prices, and drought conditions in Texas and Oklahoma could drive beef prices up even further,” the USDA said.

Fresh fruit prices have risen 5.8 percent in the year through June compared with a year-ago, though prices fell 4.1 percent in June, reflecting a decline in citrus prices and a seasonal shift to summer fruits.

The latest weekly drought monitor from the National Oceanic and Atmospheric Administration shows much of California in an extreme or exceptional drought, the two most severe categories. Pockets of Texas are also in exceptional drought.

U.S. fish and seafood prices were forecast to rise by 3.5 percent to 4.5 percent this year, up from last month’s forecast of a 2.5 percent to 3.5 percent gain.

“In general, fish and seafood prices have been climbing due to decreased supplies of certain species and increased consumer demand, as other meats have become more expensive,” the USDA said.

(Reporting by Ros Krasny; Editing by Bill Trott and Leslie Adler)

Recent Headlines

in Local Sports

Walker throws 1-hit ball for 6 innings, Mariners top Padres

Taijuan Walker Twitter

Walker (7-6) combined with four relievers on a three-hitter for Seattle's second straight shutout of San Diego.

in Sports

Reports: GM Jerry Dipoto quits after 3 1/2 years with Angels

angelsspringbaseball

Dipoto told the Los Angeles Times and the Orange County Register on Wednesday that he has quit after 3 1/2 years with the Angels, but manager Mike Scioscia and Angels spokesman Tim Mead repeatedly refused to confirm any changes.

in Sports

NBA free agency roundup

hawkscarroll

DeMarre Carroll, Anthony Davis, Kawhi Leonard and Jimmy Butler headline the early signings in NBA free agency.

in Sports

Wimbledon: Maria Sharapova on her way to third round

sharapova

The fourth-seeded Sharapova beat Dutch qualifier Richel Hogenkamp 6-3, 6-1 on Court No. 2 on Wednesday, improving her record in second-round Grand Slam matches to 41-4.

in Local Sports

Canucks trade Kassian to Canadiens for Prust

canadiens

Prust had 15 goals and 30 assists in 172 games since signing with Montreal three summers ago.