Grocery bill increases 2 percent as beef and pork prices rise

economic-forecast-headerNational food prices rose about 2 percent from a year ago, according to a quarterly survey conducted by the American Farm Bureau Federation. Leading the trend are beef and pork prices, as sirloin tip roasts, ground chuck, sliced deli ham and bacon prices all rose 9 percent or more in that time period.

“It’s interesting to note that, with the price of beef rising the way it has, our consumption of hamburger has also increased,” said Jonah Bowles, Virginia Farm Bureau Federation senior agriculture market analyst. “More than half of our beef consumption is now hamburger, and we import a lot of hamburger, from South America and Australia in particular.”

AFBF’s informal survey showed the total cost of 16 basic food items came in at an average price of $54.26, up $1.06 from one year ago. Sirloin beef tip roast was the most expensive item with a 27 percent price increase, to $5.52 a pound.

“If you look at the market charts for feeder cattle prices over the past few months, the trend is definitely up,” Bowles confirmed.

Still, an average increase of $1.06 over a year’s time is great news for consumers, he added.

“Our food is still a good value; these values will reverse at one point,” he said. “Beef prices won’t stay there, because demand will decline once they get high enough.

“And since domestic and world demand remains strong, they won’t plummet or go back to prices from five or 10 years ago. Consumers in Asia and other parts of the world are experiencing beef that have not done so in the past.”

Futures market prices for crude oil, gasoline, ethanol and diesel fuel all have been trending down as well, Bowles said, which is more good news for consumers.

“Every dollar that does not go into the gas tank is freed up to purchase other necessities and luxuries,” he said.

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