NEW YORK (MainStreet) Although many food items, such as beef, pork and oranges are rising in price due to droughts and crop viruses, there are still some items on the shelves that are affordable for budget-conscious shoppers.
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"When you take a bird's eye view of the supermarket, now the situation is that inflation is stronger in the perimeter of the store than the aisles," said Ricky Volpe, a food economist at the U.S. Department of Agriculture.
A recent USDA report predicts prices to rise for beef, pork, dairy, fresh fruit and fresh vegetables. Rising food cost are due to a variety a factors from consumer demand, farmers' planting decision and unpredictable weather conditions to crop and animal viruses that can impact supply; this, in turn, pressures changes in retail prices.
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A 2012 drought that thinned out U.S. cattle herds is driving retail beef prices, and drier conditions in California this year are impacting fresh fruit and vegetable production. Fresh fruit prices are expected to increase by 3.5 to 4.5%, according to USDA 2014 forecasts.
Hog prices are also at record highs because of the spread of Porcine Epidemic Diarrhea Virus (PEDv) in pigs, and retail pork prices are up by 5.3% on the year, according to the Bureau of Labor's food statistics.
Despite the rise in price for beef, pork and many fresh produce, most items at the store will increase at normal rate of inflation -- which is set between 2.5 and 3.5%, according to the USDA Economic Research Service.
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"The things that are opposite are breakfast cereals, side dishes, condiments, sugars, sweets, cookies and crackers," Volpe said. "These foods are experiencing almost a flat price and will continue to become relatively cheaper in the future."
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In order to beat the rising costs, here are some foods you should buy to fill your stomach -- as you keep your wallet robust.
Whole Wheat Bread
- 4-year change: +14%
- 1-year change: +1.7%
- Current Price: $2.06 per pan
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Over the last two year, the U.S. has the highest grain supply since the 1960s. Major food crops, such as corn, wheat, soybean and rice are strong and prices for these staples are down from 2012, according to Michael Swanson, an agricultural economist at Wells Fargo Bank.
"The inflation of all these shelf safe goods, bakery good, cereals and pasta and all that, is pressure on those food is down and prices for those food should remain down into next year," Volpe said.
Canned Orange Juice
- 4-year change: -2%
- 1-year change: -2%
- Current Price: $2.43 per 12 oz. can
The process market for fruits and frozen juice is huge and a place where consumers will see relatively low prices. Prices for processed vegetables and fruits are governed by longer-term contract and tend to be more predictable.
Most of the orange concentrate market comes from Brazil, which has a huge capacity to respond to surges and demand, food economists say.
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Peanut Butter (Creamy)
- 4-year change: 29%
- 1-year change: -2.5%
- Current Price: $2.70 per lb.
After a steep jump in peanut prices in 2012, peanut butter prices have started to decline.
"Peanut prices have come down way over the last year, so peanut butter is one of the things that we will see a much better price on a going-forward basis," Swanson said.
Other U.S. grown nuts, such as almonds, pecans and pistachios are rising in price in response to higher global demand from China. The Chinese are taking advantage of their higher incomes to buy U.S. almonds, pistachios and pecans, but that's not the case for peanuts.
"The Chinese don't need to come to the United States to get their peanuts," the Wells Fargo economist said.
Chicken (Skinless, Boneless)
- 4-year change: 6%
- 1-year change: 7.4%
- Current Price: $3.46 per lb.
Even though inflation has been higher than normal poultry products, the cost of buying ground turkey or other poultry retail items is considerably cheaper than beef and pork prices. A pound of boneless chicken breast costs $3.46, comparatively cheaper than a round USDA choice steak priced at $5.29, according to the Bureau of Labor's consumer price index.
"Ground chicken and ground turkey is still cheaper per pound than most ground beef. And, a boneless, skinless chicken breast is cheaper alternative to steak especially today," Volpe added.
Food economists predict that consumers can expect poultry prices to drop this year as a response to lower feed stock prices.
"Turkeys and chickens are going to be better bargains going forward over the next six months," said Swanson.
Apples (Red Delicious)
- 4-year change: 15%
- 1-year change: -4.3%
- Current Price: $1.33 per lb.
The recent dry spell in California compelled the USDA to readjust its inflationary forecast for the rising cost of fresh fruit. The drought could impact California commodities, such as strawberries and tomatoes.
Apples are a safe bet for stable prices. The pomaceous fruit is mainly grown across a wide-number of Northern states from New York, Michigan, Wisconsin to Washington, so its prices are more resistant to localized, incremental weather.
"And, it typically takes a large weather event to hurt an area like Washington and they have a lot of capacity to respond to early set-backs," said Swanson, who has been covering agricultural production trends for the last 15 years. "They've been planting for years and they're prices reflect whether they have had a decent growing year."
- 4-year change: -5%
- 1-year change: -7%
- Current Price: $0.60 per lb.
Sugar prices are down by 50% over the last four years, according to the American Sugar Alliance. The ASA, the beet cane and sugar producer trade group, reports that Mexico's rising sugar exports to the U.S. have spurred prices to drop to record lows not seen since the 1980s.
"The center of store, which is kind of based on more of the grains, oilseed complexes, and sweeteners -- is going to be stable to be declining in price going forward," Swanson said.
--Written by Farran Powell for MainStreet