Temperatures have been high for weeks and now food prices may be going higher, too. After the first of the year, Iowans may have to make more upward adjustments in their grocery budgets. Ricky Volpe, a food price analyst for the U.S.D.A., predicts above-average food inflation will hit in 2013.
Volpe says, “A lot of it does have to do with the drought because we are expecting higher corn prices and higher soybean prices as well as higher commodity prices across the board.” The average rate of inflation is right around three-percent and that’s what we’ve seen in the first half of 2012.
Next year, he says, it’ll likely be a little higher as so many crops are struggling in the hot, dry weather in Iowa and all across the nation’s breadbasket. “Grocery prices are projected to increase three-to-four percent,” Volpe says.
“Food away from home, restaurant prices, two-and-a-half percent to three-and-a-half percent.” He predicts beef prices will increase about 5% in 2013, while cereal, milk and bread prices will likely rise around four-percent.
“We’re now on track for a year of above-average food price inflation in 2013,” he says. A report from the U.S. Bureau of Labor Statistics finds some meat prices are already rising. Between June 2011 and June 2012, the price tag on sirloin steak rose more than 15%, while prices for ground beef rose more than 8% and chicken prices went up by more than 6%.