Feds: Retail Food Prices To Increase By An Additional 5%

Bethany Blankley (The Center Square).

The U.S. Department of Agriculture expects U.S. food prices to increase by at least another 5% on average this year as the majority of Americans surveyed in a new poll cite cost of living increases as a top concern and lack of confidence in President Joe Biden’s ability to do anything about it.

Inflation, increasing interest rates by the Federal Reserve and the consequences of Russia’s invasion of Ukraine are the main causes for rising prices, according to the USDA in their most recent monthly report. Outlook on Food PricesThis forecasts retail inflation.

The USDA said it raised its estimate after two months of price surges “across many of the food categories.”

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“The impacts of the conflict in Ukraine and the recent increases in interest rates by the Federal Reserve are expected to put upward and downward pressures on food prices, respectively,” it adds.

It states that all food prices will increase by between 4.5% to 5.5%. The most significant change in the price of food is the rise in the cost for cooking oil and poultry, which are estimated at around 7%. The only thing that was updated downward was the price of fresh vegetables.

“Retail poultry prices have been high with historically low stocks of frozen chicken,” or cold storage, it adds, attributing some of this to an outbreak of avian influenza. The egg prices will rise between 2.5% to 3.5%.

The USDA attributes increased dairy prices to “rapid increases in the consumption of dairy products.” In February, retail dairy prices increased by 1.6% and are expected to increase between 4% and 5% overall this year compared to last year.

Fats and oils prices will go up by 6%, 7% respectively. Fresh fruit will cost between 5% to 6% more; while processed vegetable and fruit will be higher between 4.5%-5.5%.

The USDA’s forecast is in line with a recent analysis by Dallas Fed economists on the impact of sanctions on Russia.

“The effect of the Russian invasion is not limited to energy markets,” they Send an email. “Russia and the Ukraine together account for 29 percent of global wheat exports. In 2022, and possibly beyond, Russia’s financial sanctions and disruptions to exports of grain from the Black Sea will likely result in a reduction of the wheat supply. The diminished supply, along with a shortage of fertilizer produced from natural gas, will drive up global food prices and reinforce the growth-retarding and inflationary effects of higher fuel prices.”

Prior to Russia’s invasion of Ukraine, inflation hit a 40-year high and food prices had already begun their steady rise. The conflict is expected to exacerbate existing cost of living conditions as Americans express losing confidence in Biden’s ability to improve the economy or have any influence on the Russian-Ukrainian conflict.

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An example of a recent NBC News article Poll found that 62% of respondents said their family income is falling behind cost of living increases, the most important issue identified by those polled.

A strong majority, 71%, said the nation is on the wrong track, as evidenced by Biden’s approval rating of 40%. A majority polled, 55%, say Biden isn’t doing a good job on a range of issues, with sky-high prices from food to gas among top concerns.

“Just some” (27%) and “very little” (44%) said they had confidence in Biden’s ability to respond to Russia’s invasion of Ukraine. This included 43% of Democrats who said they have “just some” (36%) or “very little” (7%) confidence, according to the poll.

Respondents indicated that 57% believe the U.S. already has a war with Russia (16%), or they expect it to happen within the next 12 months (41%).

The Center Square permission granted this syndicated version.