If you love steaks and eggs, you can expect to pay more for
steak and less for eggs this year, according to University of
Georgia experts.
"Consumers are going to see a larger-than-average
increase
in red meat prices this year and a lower-than-average increase
in eggs, poultry and dairy products," said John McKissick,
an agricultural economist with the UGA College of Agricultural
and Environmental Sciences.
Food prices increased only 2.1 percent in 1999 and are
forecast
to increase 2 to 2.5 percent in 2000. "This is the smallest
increase in food prices since the early 1990s," McKissick
said.
Less Cows and Pigs
Both beef and pork producers trimmed their herds back in
response
to low prices over the past few years. The reduction in supply
should cause price increases in beef and pork this year.
"These cut backs will result in an up-to-four percent
decline in supply on the retail level," McKissick said.
"Reduced
supplies make prices go up and the latter half of the year 2000
should bring a 4 percent increase in retail beef
prices."
The beef price increase is also a result of a
"resurgence"
of demand for beef, especially high-end steaks. "Hotel and
motel restaurants and the export market are demanding higher
quality
choice cuts and the price of these cuts of beef may go up in
price
even more," he said. "As a result, farmers will see
increased prices this year."
This should also be a better year for pork producers.
"Pork
producers have lost billions of dollars over the past two years,
but they may see a slight profit this year," McKissick
said.
Low grain prices should help pork producers. Despite reduced
production, retail pork prices may rise only two- to
three-percent
this year. "We had to move a record amount of pork these
past two years, but retail price haven’t dropped because the
consumer
demand was there," he said. "There’s also a strong
demand
for products like bacon which has practically become a sandwich
condiment."
Eggs, Milk and Chicken Still Best
Buys
Consumers can expect to see no price increases or lower prices
on eggs, milk and poultry due to large increases in
production.
Eggs production increased by three to four percent this year.
"The retail price of eggs has decreased about three percent
each year and consumers should see a price decrease again this
year," he said. "Egg prices should decline one to two
percent."
Poultry producers are also benefitting from low grain prices
and production should be up by at least six percent. Consumers
should see no change in prices in the supermarket.
"Broiler prices are likely to decline some as the Russian
market has dried up," McKissick said. "About 17 percent
of the poultry produced in the U.S. is exported; primarily
dark-meat
chicken."
Milk prices will also remain unchanged this year. "Milk
prices have been strong and production has been on the
increase,"
McKissick said. "Retail milk prices will likely remain
constant
or show a low increase."
Veggies Will Cost You
If you’re trying to add more fresh vegetables to your diet,
get ready to pay more for them this year.
"Vegetable prices were down last year because the acreage
in the U.S. increased by five percent," McKissick said.
"Expect
to see a more than average increase in vegetable an fruit
prices."
Despite the fact that low grain prices are lowering farmer’s
costs, consumers shouldn’t expect to see a decrease in the price
of grain products.
"Processed products like cereal and oils will show an
average price increase despite the large supplies in these
commodities,"
he said.
"Overall, food remains a good buy for consumers with the
typical consumer spending less than 11 percent of their income
on food," McKissick said. "At-home food prices should
increase 2 to 2.5 percent this year and consumers should pay
about
2.5 to 3 percent more on the price of restaurant and fast-food
meals."
(Photo by Sharon Omahen, University of Georgia College of
Agricultural and Environmental Sciences.)
