Bird flu outbreaks are driving up egg and poultry meat prices far faster than usual, with eggs expected to cost 20% more and poultry 9% more this year than their 2021 averages, according to USDA. The department’s economists raised their forecasts of food inflation for the fourth month in a row, to the highest rate since the end of the Carter presidency.
“An ongoing outbreak of highly pathogenic avian influenza has reduced the U.S. egg-layer flock and drove a 10.3% increase in retail egg prices in April,” quoted by USDA in its monthly Food Price Outlook report. “Retail poultry prices have been high, with historically low stocks of frozen chicken (also called 'cold storage'). The loss has involved a total of 38 million birds.”
The USDA has forecast an annual food inflation rate of 7%, which would be the highest since the 9.8% rate in 1981, the year President Reagan took office. Grocery prices are expected to increase at a rate of 7.5%, which would be the highest since 8.1% in 1980, the last year of the Carter era.
“Food inflation is broad-based, said the USDA, so increases in the overall inflation rates were driven by increases for many products.” A month ago, USDA forecast that all food and grocery prices would rise an average of 5.5% this year.
The USDA forecast that prices for fats and oils would rise by an average of 10.5% this year, compared with the usual 2.3%. The predicted 9% increase in poultry prices is nearly four times the usual rate. A 7% increase was forecast for the category of beef, pork, poultry, and other meats, more than double the long-term average of 3.2% a year.
Fruit and vegetable prices were also forecast for a 7% annual increase, compared with the usual 2%. Cereal and bakery products, with a long-term average annual increase of 2.1%, were forecast to rise 7.5% this year.
Editor’s Take:
Unsettling news for consumers, especially those on fixed incomes or living paycheck to paycheck. Couple this news with higher interest rates and rising gas prices, etc. and many consumers are definitely feeling the pain! In addition, the struggling stock market will cause many to become more cautious as the “wealth effect” kicks into negative territory. All that said, your CAD team firmly believes that farmers/ranchers should be very high on your customer prospect list. Not only do they have cash from record high commodity prices, but their balance sheets are extremely solid due to rising land values. Plus, you have the perfect anecdote to any inflation fears they might have, with AgPack. So put your inventory on AgTruckTrader.com to let them know you’re actively seeking their business!
