Despite the worst drought in years, Iowans may be paying less for many fresh fruits and vegetables in the coming months, though a federal report predicts price hikes in virtually all other food categories. Iowa is the nation’s number-one pork producer and U.S.D.A. food price economist Ricky Volpe is lowering his forecast for retail pork prices.
“We’ve been seeing pork prices falling and that’s only picking up recently as we’re seeing hog ranchers across the U.S. cull their herds in expectation and anticipation of higher feed prices,” Volpe says. “We’re looking at pork prices to go up 1% to 2% in 2012 but I do note that’s expected to turn around and pick up quite a bit in 2013.”
Overall, the U.S.D.A. forecast calls for prices in all food groups combined to go up between three and four-percent next year. “Even if we end up at the lower end of that range, we’re still looking at inflation that’s higher than historically normal,” Volpe says.
“Not to the level of what we saw in 2011 or even the one-two punch of ’07 and 08, but still higher than what consumers have come to expect in a given year and again, this is on top of already-very high prices in most consumer categories.” While food prices are expected to rise overall, Volpe says there’s one category that should see prices fall.
“Growing conditions and weather have remained excellent, very favorable for most major fruit and vegetable crops throughout 2012 and we’re now on track for deflation for fresh vegetable prices,” Volpe says. “We’re now forecasting fresh vegetable prices to fall 1 to 2%. I should note that a forecast for deflation for a major category such as this is very rare.”
The drought had a much more serious impact on beef prices, which are expected to rise 5% in 2013. That follows a 4% rise this year and a 10% hike in 2011.