Food prices settling down

Created: 4/17/12 (Tue) | Topic: Education

The American Farm Bureau Federation’s Marketbasket Survey for the first quarter of 2012 shows retail prices were up about 7 percent from last year at this time and from last quarter. However, the news is not all bad said John Anderson, an AFBF economist.

“I think the rate of increase has slowed down,” Anderson said. “As we talked about a lot last year we expected fairly aggressive food price increases last year and we did get that. We’ve been saying for the last two or three months that we expect that to slow down in 2012 and that also seems to be happening. We’re looking for food price inflation that’s much more in line with the general level of prices, so somewhere in the 2 to 3 percent range.”
Anderson cautioned that prices at the meat counter are likely to remain high.
“When you think of cattle you think of Texas, Oklahoma, Kansas, New Mexico, places like that and they were devastated by the drought last year and that forced a lot of farmers and ranchers to really reduce their numbers,” he explained. “A lot of cattle had to be sent to market because there was just not really anything to feed them, nothing that could be fed economically. So that has reduced the productive capacity.”
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