WASHINGTON — The Agriculture Department said Friday that consumers can still expect higher food prices next year, but the expected increase was unchanged from last month, even as extreme heat in the Farm Belt continues to reduce the grain harvest and increase feed prices for livestock.
According to the latest Agriculture Department consumer food price index, overall food prices are expected to increase 3 percent to 4 percent next year largely because of the drought, the same as last month's forecast.
“The data out this morning shows that nothing much has changed,” said Ephrain Leibtag, deputy director of research at the Economic Research Service at the Agriculture Department.
The price of beef and veal will see the largest increases next year, the report said, almost entirely because of higher costs for feed, which is made from corn and other grains. Beef and veal prices are expected to increase 4 percent to 5 percent. The most immediate impact of the drought will be seen in poultry prices, the government predicted.
The Agriculture Department said consumers will see higher poultry prices this year because chickens consume feed more quickly than other livestock.
Government forecasters reiterated their projection of a 3.5 percent to 4.5 percent jump in chicken and turkey prices this year. The prices are expected to rise a bit less next year, in the range of 3 percent to 4 percent, the government said.
About 40 percent of the corn crop is used to feed livestock. Feed costs account for 50 percent to 70 percent of livestock and poultry production, according to the American Feed Industry Association, a trade group.
The increase in feed prices has caused many cattle producers to sell off or cull their herds. Cattle sales are up nearly 30 percent over last year, said Sara Baker, a spokeswoman for Sageworks, a financial information company based in New York that tracks the sales.
Ironically, the Agriculture Department said the reduction in the number of cows could result in a temporary decline in beef prices this year as a surplus of cattle is sold and more meat enters the market.
Cheese and milk products are expected to increase 3.5 percent to 4.5 percent next year, unchanged from last month's forecast. Egg prices will also be affected, with prices forecast to rise 3 percent to 4 percent next year.
A government estimate released earlier this month said that because of worsening drought conditions, farmers would produce about 10.6 billion bushels of corn this year, down from what was projected at the beginning of the year to be a record 15 billion bushels. The reduction in corn and soybean supplies has pushed up their prices to record levels.
The Agriculture Department said this week that 85 percent of this year's corn crop was in drought-impacted areas, and 83 percent of the soybean crop was threatened.
As of Monday, just 23 percent of the corn crop was rated in good or excellent condition, while 31 percent of soybeans were rated good or excellent.
“The data out this morning shows that nothing much has changed,” said Ephrain Leibtag, deputy director of research at the Economic Research Service at the Agriculture Department.
The price of beef and veal will see the largest increases next year, the report said, almost entirely because of higher costs for feed, which is made from corn and other grains. Beef and veal prices are expected to increase 4 percent to 5 percent. The most immediate impact of the drought will be seen in poultry prices, the government predicted.
The Agriculture Department said consumers will see higher poultry prices this year because chickens consume feed more quickly than other livestock.
Government forecasters reiterated their projection of a 3.5 percent to 4.5 percent jump in chicken and turkey prices this year. The prices are expected to rise a bit less next year, in the range of 3 percent to 4 percent, the government said.
About 40 percent of the corn crop is used to feed livestock. Feed costs account for 50 percent to 70 percent of livestock and poultry production, according to the American Feed Industry Association, a trade group.
The increase in feed prices has caused many cattle producers to sell off or cull their herds. Cattle sales are up nearly 30 percent over last year, said Sara Baker, a spokeswoman for Sageworks, a financial information company based in New York that tracks the sales.
Ironically, the Agriculture Department said the reduction in the number of cows could result in a temporary decline in beef prices this year as a surplus of cattle is sold and more meat enters the market.
Cheese and milk products are expected to increase 3.5 percent to 4.5 percent next year, unchanged from last month's forecast. Egg prices will also be affected, with prices forecast to rise 3 percent to 4 percent next year.
A government estimate released earlier this month said that because of worsening drought conditions, farmers would produce about 10.6 billion bushels of corn this year, down from what was projected at the beginning of the year to be a record 15 billion bushels. The reduction in corn and soybean supplies has pushed up their prices to record levels.
The Agriculture Department said this week that 85 percent of this year's corn crop was in drought-impacted areas, and 83 percent of the soybean crop was threatened.
As of Monday, just 23 percent of the corn crop was rated in good or excellent condition, while 31 percent of soybeans were rated good or excellent.
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