Retail prices for U.S. beef and pork, already at record highs, will increase significantly again in 2015 on a combination of disease and the drought in Southern Plains, the Department of Agriculture said on Nov. 25.

"Meat prices will likely continue to experience the effects of the Texas/Oklahoma drought and porcine epidemic diarrhea virus (PEDv) in the immediate future," the agency said.

Beef and veal retail prices for 2014 are now forecast to rise by 11.5 percent, up slightly from the last month's forecast of 11 percent, and jump another 5 percent in 2015, versus a 3.5 percent increase forecast a month ago.

 
 
 

"Improved crop yields have allowed cattle producers to feed cattle longer and to hold cattle for expansion," USDA said. "However, signs of herd expansion are anecdotal at best."

For the year ended in October, U.S. beef and veal prices were up almost 18 percent.

The USDA maintained its forecast for a pork price increase of 8 percent but now sees 2015 prices rising by 5 percent, up from 3.5 percent last month. Retail pork prices finally started to subside in October, slipping 0.8 percent.

PEDv, a virus that killed millions of U.S. piglets earlier this year, has reduced the number of hogs ready for production, but there are finally some signs of industry expansion that will drag down hog prices next year, USDA said.

Heading into the U.S. Thanksgiving holiday, USDA said overall poultry prices fell 0.9 percent in October. The "other poultry" category, which includes turkey, fell 1.5 percent in October and is down 0.2 percent on the year.

The agency forecast overall U.S. food price inflation for 2014 at a midpoint of 3 percent, just above the 20-year average, subsiding to 2.5 percent next year.

Prices for sugar and sweets are now forecast to be roughly unchanged in 2014 after earlier being forecast up 1.5 percent.

The severe California drought has so far not had a major impact on fresh fruit prices, which are forecast to rise to 3.5 percent this year and 3 percent in 2015.

Much of the overall rise in fresh fruit prices reflects recent increases for strawberries and grapes, USDA said.