(Adds additional details from report)
By Ros Krasny
WASHINGTON Aug 25 Retail prices for many U.S.
meats, already at record highs, continue to rise on a
combination of drought and disease, but overall food cost
increases remain near long-term averages, the U.S. Department of
Agriculture said on Monday.
The agency now forecasts pork, beef and veal prices to rise
by 6.5 to 7.5 percent in 2014, up from 5.5 to 6.5 percent
forecast a month ago. The overall "meats, poultry and fish"
category will rise by 4 to 5 percent.
Overall U.S. food inflation - items bought in grocery stores
and in restaurants - will be 2.5 to 3.5 percent in 2014, in line
with historical norms, and is expected to be slightly lower at 2
to 3 percent in 2015, the USDA said.
Since 1990, U.S. grocery store prices have risen by an
average of 2.8 percent annually.
The agency said that although food-at-home prices increased
more in the first half of 2014 than in the whole of 2013, the
lower prices outlook for commodities such as corn and soybeans,
as well as rising animal inventories, should provide relief.
Record high pork prices are partly due to the impact of a
virus that has killed millions of piglets, as well as the higher
cost of pork imports from Europe. For this year through July,
retail pork prices jumped almost 11 percent.
Meanwhile, the lowest U.S. cattle inventories in more than
60 years are expected to drive up wholesale beef prices by 10 to
11 percent this year, with much of that increase passed down to
"The ongoing drought in California has raised concern over
rising produce prices. However, the California drought has not
yet had a discernible impact on national prices," the USDA said.
Much of California remains in an "exceptional" drought
according to the U.S. drought monitor, produced by the National
Drought Mitigation Center at the University of Nebraska-Lincoln,
USDA and the National Oceanic and Atmospheric Administration.
Fresh fruit and fresh vegetable prices both fell in July,
the USDA said. In the summer more produce is purchased and
consumed from nearby locations and is often less expensive
because of lower transportation costs.
Fresh fruit prices are still expected to increase by 5 to 6
percent in 2014.
(Reporting by Ros Krasny; Editing by Mohammad Zargham and Jim