Effects of drought to be felt at grocery store

USDA economists say that while consumers really haven’t felt the full impact of the drought at the grocery store yet, they will start seeing those effects by the end of the year.

Chicken, milk and eggs will likely be the first to rise in price—followed by pork and beef price increases in early 2013. Higher prices will spread through the rest of the grocery store by mid-year.

As for beef, USDA livestock economist Shayle Shagam says the latest sales figures show consumers are already beginning to resist higher beef prices.

“Given the uncertain economic situation right now, consumers have to look at their entire family budget and how they can allocate it among gas, among living expenses and among food,” Shagam says. “It becomes a question of how much the consumer is willing to pay for beef.”

USDA does a composite average price of choice beef cuts.  Last year it was $4.83 a pound—this year, it’s $5.00 a pound.  Shagam says it could rise again next year since beef production will be down almost four percent.

Mike Miller with the National Cattlemen’s Beef Association says consumers can expect the price of beef and other proteins to rise four to six percent in 2013.


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