U.S. beef prices will average 8 to 9 percent higher this year than they did during 2010, according to the latest Consumer Price Index for Food, from USDA’s Economic Research Service. The October report projects the trend will continue next year, but at a slower pace, with the increase in the 2012 CPI for beef projected at 4.5 to 5.5.
Meat prices in general are climbing faster than those for other food categories this year. The report lists the 2011 CPI for all food increasing by 3.5 to 4.5 percent, while meats, poultry and fish are up 5.5 to 6.5 percent. Pork prices this year are up 6.5 to 7.5 percent and poultry prices are up 2.5 to 3.5 percent. For 2012, the report projects prices for meats, poultry and fish to increase by 3.4 to 4.5 percent. Poultry is the only category among animal proteins where ERS projects a sharper price increase next year, with the 2012 poultry CPI projected to increase 3 to 4 percent.
The report projects food-at-home prices are 4 to 5 percent this year, with the increase slowing to 3 to 4 percent in 2012. Food-away-from-home prices this year will increase 3 to 4 percent this year and 2 to 3 percent in 2012, according to the report.
This year’s increases follow a period of relatively low food-price inflation. The all-food CPI increased 0.8 percent between 2009 and 2010, the lowest food inflation rate since 1962. Food-at-home prices increased by 0.3 percent—the lowest annual increase since 1967, while food-away-from-home prices rose 1.3 percent in 2010, the lowest annual increase for restaurant prices since 1955.
According to the report, cost pressures on wholesale and retail food prices due to higher food commodity and energy prices, along with strengthening global food demand, have pushed inflation projections upward for 2011. For next year, ERS analysts note that some inflationary pressures that drove prices up in 2011 are not expected to intensify and may even decrease. They add, however, that retailers have so far been slow to pass their higher costs on to consumers. Food prices during 2012 ultimately will depend on factors such as weather conditions, fuel prices, and the value of the U.S. dollar.
View the CPI for Food report from USDA/ERS.