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Entries in Food Prices (18)

Monday
Dec312012

Lawmakers Reach Deal to Avoid Rise in Milk Prices

Noel Hendrickson/Digital Vision/Thinkstock(NEW YORK) -- Taxes may be going up if Congress can't reach a deal by midnight to avoid the country from going over the so-called "fiscal cliff."  But it looks like milk prices won't be soaring.

Leaders on the House and Senate Agriculture committees reached an agreement on Sunday to extend the 2008 farm bill that expired in October by one year.  The move could help prevent customers from paying twice as much for a gallon of milk next month.

Congress could vote on the bill as early as Monday.

Copyright 2012 ABC News Radio

Wednesday
Aug292012

Beef Prices Expected to Rise This Year as Farmers Deal with Drought

DC Productions/Thinkstock(NEW YORK) -- Despite the torrential rainfall in the South with Hurricane Isaac, severe drought is affecting the Midwest, which is expected to make the already rising price of beef go higher.

Many farmers are selling their cattle to save their profits because they don't have the grass and water to feed them.

Missouri, which has 106,500 ranches -- the second largest number of any state, behind Texas -- is seeing noticeably smaller herds, the St. Louis Post-Dispatch reported.

Last week, there were 30,571 cattle sold in the state, compared to 22,387 for the same week in 2011, according to data tracked by Missouri's Department of Agriculture.

"There's hardship out here for some of these guys due to drought and higher feed cost," said Bill Lapp, president of Advanced Economics Solutions, an economic research firm focused on the food industry.  "Consumers will feel pain too."

The U.S. Department of Agriculture (USDA) projects that prices for cattle, or steer, for the fourth quarter will be $1.15 to $1.23 per pound, up from the 2011 annual average of about $1.14, which Lapp said is closely correlated to consumer beef prices.

The cattle industry and beef prices have been negatively affected since 2007 by cycles in the industry and an increase in exports, he said.

Lapp said the beef industry always sees an ebb and flow in herd sizes and commensurate increases or decreases in beef production, directed by the industry's profits.

Spikes in the price of corn, which is feed for cattle, in 2008 and 2011, and then one of worst droughts in Texas and Oklahoma last year exacerbated the situation.

As supplies decrease, prices will likely increase further in 2013, consistent with the USDA's forecasts.

"Without regard to the high price of corn and drought, this has more or less been etched in stone," said Lapp, who is based in Omaha, Neb.

Copyright 2012 ABC News Radio

Wednesday
Jul252012

Food Prices Could Rise 5 Percent in Next 9 Months

Jupiterimages/Pixland/Thinkstock(WASHINGTON) -- The cost of filling grocery carts in America is going up. The U.S. Department of Agriculture announced Wednesday that it is projecting as much as a five percent price hike for some food items over the next nine months.

“Of course I’m concerned,” said shopper Barbara Webb. “I’m concerned for the people who can’t afford it.”

Behind the expensive jump is the drought, now covering 60 percent of the United States, pushing up prices for feed that translate into higher prices for beef, pork and chicken products.

Beef prices will see the biggest hike, up four to five percent, according to the USDA. That means the ground beef purchased last year for $2.77 per pound will cost consumers $3.04 per pound next year.

Dairy product prices will increase by 3.5 to 4.5 percent, bumping a gallon of milk from $3.57 in 2011 to $3.84 in 2013.

The price of eggs will also go up by three to four percent, making a dozen eggs $1.95 per dozen in 2013, compared with $1.77 in 2011.

If USDA’s economists are correct, a family who spends $150 per week on groceries will now be spending $160 by next year, bumping their annual food budget up more than $500.

Lisa Lee Freeman, editor-in-chief of ShopSmart magazine, has a few tips for families trying to keep their grocery bills down, despite the anticipated hike.

"The best thing you can do is if all you’re doing is clipping coupons in newspapers -- go online!” Freeman said. “There are literally hundreds of coupons online and if you’re not tapping that, you’re missing out on a huge resource for savings.”

Freeman also recommends buying store brands in supermarkets, joining warehouse clubs and even shopping at dollar stores to save the most money.

"Things are changing and the dollar stores are now carrying brand name items,” Freeman said. “Prices can be up to one-third cheaper at the dollar store than at the supermarket.”

The 2013 food price forecast projects an overall food price hike of three to four percent, higher than the normal annual grocery inflation of 2.8 percent.

The recent announcement is also the USDA’s first projection to factor in the drought.

David Lobell, writes studies for Climate Central, monitoring global warming. He says farmers should prepare for tougher growing conditions and higher prices in the future.

"This year is very emblematic of the type of thing we worry about with climate change,” Lobell said. “The new normal for agriculture is going to be frequent episodes of very high temperatures. Temperatures at which pretty much any crop does not do very well.”

Copyright 2012 ABC News Radio

Thursday
Jul192012

Milk Prices May Rise as Drought Spreads

Noel Hendrickson/Digital Vision/Thinkstock(NEW YORK) -- The devastating heat and drought that now covers more than half the continental U.S. is taking its toll on farmers and their crops.  The price of soybeans and corn have hit a new high and wheat prices are at their highest levels in more than four years.

But how will this affect consumers?

Supermarket prices for some foods may rise, but it’s not yet clear how big the increase will be.  Some of the first products that will likely be hit with higher costs are milk and cheese, since cows are producing less milk.

But for now, “milk prices are actually the lowest they’ve been in 18 months because of surpluses built up over an ultra-mild winter and spring," reports USA Today.

Meat prices will likely follow, rising later this year.  And while grain price increases will have some impact on consumers, they make up a relatively small share of processed food costs.

Copyright 2012 ABC News Radio

Wednesday
Jul182012

As Drought Persists, Agriculture Secretary Tom Vilsack Prays for Rain

SAUL LOEB/AFP/GettyImages(WASHINGTON) -- Agriculture Secretary Tom Vilsack is looking for some divine influence to bring relief from the drought, which is devastating crops and likely to push up food prices.

“I get on my knees every day,” Vilsack told reporters at the White House Wednesday. “And I’m saying an extra prayer now. If I had a rain prayer or a rain dance I could do, I would do it.”

Sixty-one percent of the U.S. is experiencing a drought, the worst in 25 years. Blistering heat and a lack of rain are threatening close to 80 percent of the corn and soy bean crops, leading to declining yields. The country’s livestock is also in harm’s way as a result.

“Our hearts go out to the producers, the farm families who are struggling through something that they obviously have no control over and trying to deal with a very difficult circumstance,” Vilsack said, following his Oval Office meeting with President Obama.

As of Wednesday, nearly 1,300 counties have been designated as disaster areas.

The secretary admitted that the drought, which is already driving up corn and bean prices, will likely impact the greater economic recovery.

“One out of every 12 jobs in the economy is connected in some way, shape or form to what happens on the farm,” he said. “So, obviously, this drought will provide some degree of uncertainty.”

Vilsack urged Congress to provide help and assistance to the nation’s farmers.

“The most important thing is for Congress to take action to provide some direction and assistance so that folks know what’s going to happen, what kind of protection they’re going to have,” he said. “That certainty is really important, and that’s whether they want to get to work on the food, farm and jobs bill, they want to develop a separate disaster program or an extension of existing programs, whatever it might be. Having that done as soon as possible will be quite helpful.”

In the meantime, the USDA is opening areas in the Conservation Reserve Program for emergency grazing and giving farmers access to low-interest federal loans.

Copyright 2012 ABC News Radio

Tuesday
Jul172012

Higher Food Prices Likely as Drought Worsens

Ryan McVay/Photodisc(NEW YORK) -- The price of many food products could increase later this year as much of the country is hit with the worst drought in a generation.

Wholesale corn prices shot up nearly 5 percent Monday, and soybean prices are also heading higher.

Crop losses will be a blow to America’s rural economy and cut farm exports. The U.S. Agriculture Department slashed its estimate of this fall’s corn crop by 12 percent – compared with last month’s forecast. Officials say 38 percent of the corn crop is in poor condition because of the drought. A shortage of corn and soybeans is raising concerns about global food shortages and inflation.

Still, it may take months for some food and meat costs to rise in supermarkets.

According to a government estimate, cereals and grains accounts for just 2 percent of the U.S. consumer price index.

Copyright 2012 ABC News Radio

Sunday
Jul152012

Agriculture Secretary: Drought Won’t Affect Food Prices This Year

Jupiterimages/Pixland/Thinkstock(NEW YORK) -- Food prices may go up next year, but for now the severe drought conditions should not have an immediate effect on prices at the grocery store, according to Agriculture Secretary Tom Vilsack.

“The prices and the impact of a drought will probably not likely be seen in the grocery aisle until later next year in 2013,” Vilsack said on CNN’s “State of the Union.”

Commodity prices are different from actual prices that we see in the stores the next day.  And while commodity prices are on the rise, Vilsack argues that those increases will not translate into immediate price increases.

The secretary also chastised any business currently engaged in price gouging.

“If folks are using this opportunity to raise prices inappropriately, then shame on them,” Vilsack said.

Vilsack instead points to the high energy costs associated with transporting food as the culprit for any recent fluctuation in supermarket prices.

“That’s why it’s important for us to continue to focus on the President’s ‘all of the above’ approach to produce more energy in the United States,” he said.

Congress is considering a farm bill that would reinstate farmer disaster relief.

Copyright 2012 ABC News Radio

Friday
Mar092012

Beef, Laundry Detergent Prices Expected to Rise in 2012

Jupiterimages/Pixland/Thinkstock(WASHINGTON) -- Food prices are on the rise both in the U.S. and internationally because of bad weather and rising oil prices, but products we use at home including detergents are spiking as well.

The UN's Food and Agriculture Organization said its price index rose 1 percent from January to February, after rising almost 2 percent in January. The packaged food giant Kraft Foods, for example, raised prices 7.6 percent worldwide in the fourth quarter of 2011.

Speculation is blamed for part of the increase in food prices, placing poorer countries more at risk of social unrest, Wired Magazine reported.

The U.S. Consumer Price index (CPI) for all urban consumers increased 0.2 percent in January on a seasonally adjusted basis, the Bureau of Labor Statistics reported Feb. 17. Over the last year, the food index rose 4.4 percent.

Higher oil prices add to the cost of producing and transporting food and consumer staples. Oil rose for the second day on Thursday as Iran, the second-biggest OPEC producer, cut production after the U.S. and European nations imposed sanctions on the country related to its nuclear program.

Crude oil for April delivery settled at $106.58 a barrel and on the New York Mercantile Exchange at $106.58.

Bill Lapp, president of Advanced Economics Solutions, an economic research firm focused on the food industry, said beef will have the most noticeable price increase this year of all foods, after record increases in 2011.

Lapp's company is projecting a 12 percent increase in the cost of beef this year, most of which will be passed on to consumers. He said consumers could see increases of as much as 10 percent because a large amount of beef is sold in "retail cuts."

Limited beef supplies, in part due to reduced production and continued strong export demand, is driving the increase in prices.

Chicken prices will generally be higher in 2012 because of reduced supplies as chicken producers in the U.S. faced poor margins in 2011. He said the resulting cutbacks will limit supplies and lead to higher prices.

Fuel prices are eventually passed on, but retailers and restaurants face difficulty on passing those onto consumers as the businesses battle for the consumer's limited budget.

Rising fuel prices can also be attributed to the growing use of bio-diesels, said Tom Branna, editorial director of the Household and Personal Products Industry (Happi) magazine.

That has led to a rise in raw materials across the board because many chemical derivatives come from oil, which may affect household products like detergents.

Last June, Procter & Gamble, the world's largest household products maker, increased detergent prices by 4.5 percent, Happi reported. The company, based in Cincinnati, makes Tide, Gain and Era laundry detergents.

While laundry products have been engulfed in a "price-cutting atmosphere," Branna said marketers will think of new related products with higher margins to make up for any potential losses.

Procter & Gamble introduced Tide Pods last month after delaying the launch from August. Touted as the biggest laundry innovation of the year, a pod is a single-dose, dissolvable packet of detergent, stain fighters and brighteners all in one.

The retail price for a 35-count is $9.99, the 57-count retails for $14.99 and the 90-count is $21.49. The company says the products are more expensive than traditional detergent, but in line with other premium laundry products such as Tide with a Touch of Downy.

Branna said other manufacturers and markets are expected to follow suit and create similar premium laundry products.

"They're hoping consumers say, 'I like the use of the pods because they're easy to use and I'll pay the price for it,'" Branna said.

Copyright 2012 ABC News Radio

Friday
Jul012011

Corn Prices Drop Even Further; Relief on the Way?

Jupiterimages/Thinkstock(NEW YORK) -- The price of corn on commodities markets has dropped 10 percent in the past 24 hours, marking the biggest plunge in 15 years.

Three weeks ago, corn prices were at record highs and since then, they have dropped more than 20 percent.  This could translate into some relief for consumers who have been hit with high food costs.

The soaring cost of corn this year has been a big cause of food price inflation.  The crop is still relatively expensive but Friday's plunge on commodity markets comes after an announcement by the U.S. Department of Agriculture which said farmers in Minnesota, Iowa, Nebraska and other states planted a lot more corn than expected.

Copyright 2011 ABC News Radio

Wednesday
Jun292011

Consumer Confidence Slumps to Seven-Month Low

Brand X Pictures/Thinkstock(NEW YORK) -- American consumers remain skittish about the economic recovery more than two years after the biggest recession in decades finally ended.

The Conference Board reported Tuesday that consumer confidence, the most important indicator of how people feel about the U.S. economy, was down to 58.5 in June, down from 61.7 in May.

June's numbers represent a seven-month low in consumer confidence that can be attributed to rising energy and food prices, the still weak housing market and unemployment hovering at around nine percent.

In summing up consumer woes, economist Mark Vitter said, "We have a fairly weak economy with little to no job growth.  With consumers so worried about their job prospects, I’m not so sure that we can count on demand picking up.  The housing market is dead in the water."

Consumer spending represents about 70 percent of the gross domestic product.  During good times, confidence stands at about 90 or above.  During the height of the recession, it was down to under 30.

Copyright 2011 ABC News Radio







ABC News Radio