Transcript What is Driving Food Prices? Corinne Alexander [email protected] Purdue University August 16, 2013 Department of Agricultural Economics Purdue University.

What is Driving
Food Prices?
Corinne Alexander
[email protected]
Purdue University
August 16, 2013
Department of Agricultural Economics
Purdue University
Year-Over-Year % Change
Retail Food Price Changes,
Year-over-Year Annual Rates, By Months, 2011- July 2013
7.0%
6.5%
6.0%
5.5%
5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
-0.5%
-1.0%
-1.5%
-2.0%
-2.5%
-3.0%
CPI-U
Food Away
Food at Home
Department of Agricultural Economics
Purdue University
Changes in Food Price Indexes
Item
Relative
imp.
Consumer Price
Indexes
All food
Food away from home
39.6
Food at home
60.4
Meats
12.9
8.4
Beef and Veal
3.8
Pork
2.6
Other meats
1.9
Poultry
Fish and seafood
2008
2009 2010 2011 2012
Percent
100.0
Meats, poultry, and fish
Forecast Forecast
2.3
2.2
Eggs
0.8
Dairy products
6.4
Fats and oils
1.8
2013
2014
1.5 to 2.5
2.5 to 3.5
2.0 to 3.0
2.5 to 3.5
1.5 to 2.5
2.5 to 3.5
1.5 to 2.5
2.5 to 3.5
1.0 to 2.0
2.5 to 3.5
2.0 to 3.0
2.5 to 3.5
0.0 to 1.0
2.0 to 3.0
2.0 to 3.0
2.0 to 3.0
3.0 to 4.0
3.0 to 4.0
2.0 to 3.0
2.5 to 3.5
2.5 to 3.5
2.0 to 3.0
2.0 to 3.0
2.5 to 3.5
1.0 to 2.0
1.5 to 2.5
Percent change
5.5
4.4
6.4
4.2
3.5
4.5
2.3
3.1
5
6
14
8
13.8
1.8
3.5
0.5
0.5
-0.6
-1.0
-2.0
2.3
1.7
3.6
-14.7
-6.4
2.3
0.8
1.3
0.3
1.9
2.8
2.9
4.7
-0.1
-0.1
1.1
1.5
1.1
-0.3
3.7
1.9
4.8
7.4
8.8
10.2
8.5
6.4
2.9
7.1
9.2
6.8
9.3
2.6
2.8
2.5
3.6
3.4
6.4
0.3
1.7
5.5
2.4
3.2
2.1
6.1
Department of Agricultural Economics
Purdue University
Changes in Food Price Indexes
Relativ
e
Item
imp. 2008 2009 2010 2011
Consumer Price
Percen
Indexes
t
Percent change
Fruits and vegetables
Fresh fruits &
vegetables
Fresh fruits
Fresh vegetables
Processed fruits &
vegetables
Sugar and sweets
Cereals and bakery
products
Nonalcoholic
beverages
Other foods
2012
Forecast Forecast
2013
2014
9.0
6.2
-2.1
0.2
4.1
-0.6
2.0 to 3.0
2.5 to 3.5
6.9
5.2
-4.6
0.6
4.5
2.5 to 3.5
2.5 to 3.5
3.5
4.8
-6.1
-0.6
3.3
2.0 to 3.0
2.5 to 3.5
3.3
5.6
-3.4
2.0
5.6
-2.0
1.0
-5.1
2.5 to 3.5
2.0 to 3.0
2.1
9.5
6.6
-1.3
2.9
1.0 to 2.0
2.5 to 3.5
2.1
5.5
5.6
2.2
3.3
3.8
3.3
0.0 to 1.0
2.0 to 3.0
8.7
10.2
3.2
-0.8
3.9
2.8
1.5 to 2.5
2.0 to 3.0
6.7
4.3
1.9
-0.9
3.2
0.0 to 1.0
2.5 to 3.5
11.9
5.2
3.7
-0.5
2.3
1.1
3.5
1.5 to 2.5
2.0 to 3.0
Source: USDA Economic Research Service
http://ers.usda.gov/data-products/food-price-outlook.aspx
Department of Agricultural Economics
Purdue University
Department of Agricultural Economics
Purdue University
Department of Agricultural Economics
Purdue University
2014 US Food Price Inflation
• ERS predicts (July 25, 2013)
• 1.5 to 2.5% for 2013
• 2.5 to 3.5% for 2014
• For 2013, year-to-date is about 1.5%
• Expect 2014 to have low/normal food price inflation
• Retailers can rebuild profit margins
• Big drivers are:
• Recovery in livestock sector
• Consumer incomes
Department of Agricultural Economics
Purdue University
Department of Agricultural Economics
Purdue University
Department of Agricultural Economics
Purdue University
Food at home
2011:
$654.4 Billion
Food away 2011:
$588.9 Billion
Department of Agricultural Economics
Purdue University
Questions?