News

Your grocery bill is going up

Your grocery bill is going up

ON THE RISE: The U.S.D.A. says it expects food costs to increase this year. Photo: Reuters

By Ros Krasny

WASHINGTON (Reuters) – U.S. food prices are expected to rise more rapidly this year after a very tame 2013, led by gains in beef, poultry and egg prices, the U.S. Department of Agriculture said on Tuesday.

The food price inflation outlook assumes normal weather, the USDA said, adding that the California drought poses a risk of bigger increases in many food categories, and that high supermarket prices for beef are “here to stay.”

Various measures, including overall food, food-at-home and food-away-from-home prices, are expected to rise by 2.5 to 3.5 percent in 2014. The consumer price index for all food prices rose by 1.4 percent in 2013.

The ongoing drought in California could have “large and lasting effects on fruit, vegetable, dairy and egg prices” although that impact has not been seen so far, USDA said.

California is the No. 1 U.S. farm state, producing roughly half the nation’s fruits and vegetables. The Golden State faces a water crisis after its driest year on record in 2013. Large amounts of farmland are likely to go unplanted this year.

In other categories, USDA said farm egg prices have been exceedingly volatile recently, rising by 20 percent in February after falling by 28 percent in January.

Farm cattle and wholesale beef prices rose in February, by 1.1 percent and 2.4 percent respectively.

“While not unusually large, these changes indicate that the record-high supermarket beef prices across the country are here to stay for the coming months,” the agency said.

The category that includes many processed, shelf-stable foods is expected to rise by 2 to 3 percent in 2014 after being flat in 2013.

Those items, produced by companies such as Kraft Foods Group, and ConAgra Foods Inc., account for 12 percent of U.S. consumer food spending.

USDA said retailer profit margins, which have contracted since the severe 2012 drought, could expand this year, which would contribute to inflation.

Retail prices for cheese, ice cream, and other processed dairy foods also could be on the rise before long, a lagged result of contraction in the U.S. dairy herd, USDA said.

Since 1990, U.S. grocery store prices have risen by an average of 2.8 percent per year, according to USDA. Average supermarket prices fell between February and December 2013, by 0.2 percent.

(Reporting by Ros Krasny; Editing by Susan Heavey)

Recently Played

Latest Headlines

in Entertainment

Daughter reveals Joan Rivers is still on life support

Comedian Joan Rivers arrives for the premiere of the documentary "Joan Rivers - A Piece Of Work" during the 2010 Sundance Film Festival in Park City, Utah January 25, 2010.

Comedian Joan Rivers remains on life support after being hospitalized in serious condition due to cardiac arrest.

in Music

Paul McCartney urges Scots to shun independence

Sir Paul McCartney performs with his band during the "Out There" Tour at the Times Union Center on Saturday, July 5, 2014, in Albany, N.Y.

Paul McCartney has signed an open letter to Scottish voters urging them to choose 'No' in a crucial poll over plans for the nation to break away from the rest of the U.K.

in Music

Justin Bieber charged with dangerous driving

Canadian pop singer Justin Bieber drives a quad bike at the beach as he takes a break in a resort in Punta Chame on the outskirts of Panama City in a January 27, 2014 file photo.

Justin Bieber has been charged with dangerous driving and assault following an altercation and collision on Friday.

in Entertainment

Angelina Jolie debuts wedding dress featuring kids’ artwork

The cover of People magazine, dated 15th September, 2014, featuring the wedding of Angelina Jolie to Brad Pitt.

Angelina Jolie has debuted photos of her surprise nuptials to Brad Pitt, revealing she wore a designer wedding gown featuring artwork by their six children.

in Music

Miley Cyrus defends weed photos

Miley Cyrus performing live on stage on 'The Bangerz Tour' concert at Forum di Assago.

Miley Cyrus has defended her decision to publish pictures of her cannabis habit online, insisting she does not promote drug-taking to kids or feature it in her songs.