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Beef prices to rise 7-8 percent, USDA says

May 6, 2011 - 01:51 PM
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USDA economists are predicting higher prices at the grocery store, led by rising beef and dairy prices.

Economist Ricky Volpe predicts a 7-8 percent increase in retail beef prices in 2011 and a 6.5-7.5 percent for pork. Dairy's not much better: Volpe forecasts a five and a half percent increase in milk and yogurt prices over 2010.

The increases are attributed to rising feed and transportation costs. As corn prices go up, the price of feed goes up; rising fuel prices increase consts for all commodities but particularly meat and dairy products. Fruits and veggies will be more expensive too--3.5-4.5 percent over last year.

Not such great news for consumers, but probably even worse news for the beef industry, which has struggled with declining demand for decades. Shifting demographics, consumer preferences, and safety concerns have all contributed to less beef consumption in the U.S. The industry has tried different promotions and campaigns to raise awareness. Probably the least effective: trying to convert vegetarians.

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