Planning on barbecuing some delicious steaks this summer? For many people, those plans will probably be thinned down to hamburgers and hotdogs instead.
The reason is that grocery prices, according to economists, are going to rise in 2014 following a year in which they barely budged. Prices have already reached record highs on many food products and, at grocery stores everywhere, there are signs of trade-offs when it comes to things like red meat and fish.
“It does seem like consumers are making the choice to get the ground turkey instead of ground beef, or the filet of salmon instead of the filet of beef,” said Richard Volpe, a research economist with the U.S. Department of Agriculture.
The USDA predicts a rise from 2.5% to 3.5% as far as the overall price that families pay for food that they eat at home is concerned, compared to a rise in 2013 that was less than 1%. Of course that followed a 2.5% increase in 2012, something that created quite a bit of sticker shock among consumers.
When it comes to proteins like veal and beef, prices have already increased nearly 6%, while seafood prices rose over 7% and egg prices also shot up sharply. An economist with IHS Agriculture, Ryland Maltsbarger says that consumers don’t give up on their favorite foods completely when prices go up but in many cases will first check to see if there is a cheaper option available. If they find that prices are still too high, they’ll make the switch from serving, for example, steak or salmon to serving hamburger and turkey.
Many of the price increases that are being seen are due to weather and drought problems that have affected wide areas of the United States as well as higher import taxes and fees for foodstuffs being imported from other countries. The sharp rise in beef prices, for example, reflect the severe drought that the Midwest has faced over the last several years.
As far as the price of other food items is concerned, economists predict that they will only increase modestly this year but, considering that they’re raising every year faster than inflation, even a moderate price increase is still enough to cause a lot of changes when it comes to family meal preparations.
One bit of good news ( especially for vegetarians) is that the extremely dry winter experienced this year in California isn’t predicted to cause a huge price change for fruits and vegetables, items that are more easily obtained from overseas producers than beef.
“We’ll see some impacts from the California drought, but it will probably be on specific items, and it will be mitigated by imports,” Maltsbarger said.