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)

Recent Headlines

in Sports

99th running of the Indy 500 underway

The wing and wheel logo of Indianapolis Motor Speedway is seen on a tire during practice for the Indianapolis 500 auto race in Indianapolis, Friday, May 15, 2015.

The Indianapolis 500 got off to a rocky start. Scott Dixon is the pole sitter for the "Greatest Spectacle on Earth".

in Sports

Blackhawks beat Ducks 5-4 in Game 4 of Western final

FILE - In this March 6, 2014 file photo, Chicago Blackhawks center Jonathan Toews (19) celebrates his goal with Patrick Kane during the third period of an NHL hockey game against the Columbus Blue Jackets in Chicago. The Blackhawks have agreed to eight-year contract extensions with captain JonathanToews and star forward Patrick Kane. General manager Stan Bowman said all along that the extensions were his biggest offseason priority, and the team announced the megadeals Wednesday, July 9, 2014.

Antoine Vermette scored at 5:37 of the second overtime

in Sports

Hawks’ G Korver out for the playoffs with sprained ankle

Cleveland Cavaliers' Matthew Dellavedova (8), from Australia, is chased by Atlanta Hawks' Kyle Korver in the second quarter of an NBA basketball game Wednesday, Dec. 17, 2014, in Cleveland.

The Hawks announced Saturday that Korver has a severe high right ankle sprain. A foot and ankle specialist will determine the best course of treatment, but he definitely won't play again in the postseason.

in Entertainment

This weekend in entertainment history

tomcruise

A look back on some of the most memorable moments in Hollywood history.

Bellingham Traffic