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2013 inflation expected to climb in many food categories

fresh veggies EPA

Photo: U.S. EPA

This week’s blog posts have taken on the inadvertent theme of food, food and more food — but the many facets of production and consumption are a massive part of the United States economy and take a fairly large bit out of household budgets, so it’s a topic worth spending time on.

And with the drought of 2012 still working its way through the economy, consumers and food-related sectors will feel the pinch throughout 2013, according to the U.S. Department of Agriculture’s Economic Research Service.  Its food price outlook report says inflation will be higher than normal in a variety of food categories, from baked goods to animal products.

The latter is because the crop-killing drought made feed more scarce, boosting the costs of livestock production.  I recall hearing last summer from rural folks that animals which would normally graze on pasture land were being fed precious hay because the pastures were parched and lifeless.  That means hay for winter is more scarce, and it’s no surprise that a rash of hay thefts are being reported in various locales nationwide.

Young farmer

Young teen does chores on a family farm. Photo: National Institute for Occupational Safety and Health

So as an aside to any reporting on human food costs, you might want to check in with feed stores and feed producers on current conditions and the outlook for the rest of the year.  The U.S. Drought Monitor is still showing a good swath of the country is dry, with a gloomy outlook for 2013. 

Already, the report says, 61 percent of the U.S. winter wheat crop is under drought conditions (which may account for the USDA’s inflationary forecast on baked goods and cereals.) And who’s trying to fill the void?  Here’s a San Francisco Chronicle story about a business developing indoor-grown, hydroponic sprouts as an alternative livestock feed. It only takes six days, the article says, to generate enough sprouts for 300 head of dairy cattle!  Check with your state extension service, land-grant university and business incubators to find food innovators in your market.

Poultry farm

Photo: US Government Works

The USDA’s economic service also publishes a variety of food-price and food-expenditure statistics, so whether you’re writing about household grocery shopping or the effect of food costs on restaurant menus (what are chefs changing to offset, for example, record-high beef expenses?  Cheaper cuts?  Smaller portions?  More stews and fewer filets?)  there likely is USDA data that will help provide context.  This Nation’s Resturant News 2013 trend report says things that would normally be discarded, like fish skin, are turning up on menus as chefs seek to “use every last scrap of food” due to rising costs.

The research firm Packaged Facts reports that private label grocery goods are in greater demand as consumers seek better value; trace that trend back through the grocery supply chain.  Who gains and who loses?

And of course, you can check in to see how rising food costs are affecting employment; here’s a very comprehensive and up-to-date Bureau of Labor Statistics report on employment and wages in the food production industries; the unemployment rate for the sector is ticking up.

About the Author

Veteran financial writer Melissa Preddy served as a business writer, editor and columnist for The Detroit News from 1995 to 2008, is a Michigan-based freelance journalist. She now works as a writer and editor for a medical research unit of the University of Michigan Medical School. Follow her daily posts. | E-mail: Melissa Preddy

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