Prices for many U.S. meats, already at record highs, continued to increase on a combination of drought and disease that have culled herds, the U.S. Department of Agriculture said on Thursday.
Retail beef and veal prices spiked by 4.2 percent from July to August, the largest month-on-month increase since the end of 2003, and they have logged a 15 percent increase over the past year.
Meat prices will likely continue to experience the effects of the Texas/Oklahoma drought on cattle herds and Porcine Epidemic Diarrhea virus (PEDv) on the pig herd in the immediate future, USDA said, as farmers' decisions on calving and herd sizes based on current conditions will only kick in after some 6 to 18 months,
The agency now forecasts beef and veal prices will rise by 8 percent to 9 percent for the whole of 2014, and pork prices will rise by 7.5 percent to 8.5 percent. Price increases in 2015 in both categories are expected to subside to about 3.5 percent.
The increases in beef and pork will push the overall meat, poultry and fish category, which accounts for about 12.5-percent of U.S. grocery bills, up by 5 to 6 percent.
Projected overall U.S. food inflation was held at 3 percent for 2014, in line with historical norms, and is forecast to subside to a 2.5 percent pace in 2015, the USDA said.
In its monthly report the agency said fresh fruit prices would rise by 4.5 percent to 5.5 percent in 2014, a reduction from the previous forecast of a 5 to 6 percent increase.
The ongoing drought in California has raised concern over rising produce prices, but so far it has not had a discernible impact on national prices for fresh fruits or vegetables, USDA said.
Fresh fruit and vegetable prices fell in August, mostly reflecting the ability of consumers to buy more locally grown produce in the summer. (Reporting by Ros Krasny)
