Forget the brisket - US beef prices still spiraling up

Retail prices for US beef and pork, already at record highs, will increase significantly again in 2015 on a combination of disease and the drought in Southern Plains, the Department of Agriculture said on Tuesday.

"Meat prices will likely continue to experience the effects of the Texas/Oklahoma drought and porcine epidemic diarrhoea virus (PEDv) in the immediate future," the agency said.

Beef and veal retail prices for 2014 are now forecast to rise by 11.5 per cent, up slightly from the last month's forecast of 11 per cent, and jump another 5 per cent in 2015, versus a 3.5 per cent increase forecast a month ago.

"Improved crop yields have allowed cattle producers to feed cattle longer and to hold cattle for expansion," USDA said. "However, signs of herd expansion are anecdotal at best."

For the year ended in October, US beef and veal prices were up almost 18 per cent.

The USDA maintained its forecast for a pork price increase of 8 per cent but now sees 2015 prices rising by 5 per cent, up from 3.5 per cent last month. Retail pork prices finally started to subside in October, slipping 0.8 per cent.

PEDv, a virus that killed millions of US piglets earlier this year, has reduced the number of hogs ready for production, but there are finally some signs of industry expansion that will drag down hog prices next year, USDA said.

Heading into the US Thanksgiving holiday, USDA said overall poultry prices fell 0.9 per cent in October. The "other poultry" category, which includes turkey, fell 1.5 per cent in October and is down 0.2 per cent on the year.

The agency forecast overall US food price inflation for 2014 at a midpoint of 3 per cent, just above the 20-year average, subsiding to 2.5 per cent next year.

Prices for sugar and sweets are now forecast to be roughly unchanged in 2014 after earlier being forecast up 1.5 per cent.

The severe California drought has so far not had a major impact on fresh fruit prices, which are forecast to rise to 3.5 per cent this year and 3 per cent in 2015.

Much of the overall rise in fresh fruit prices reflects recent increases for strawberries and grapes, USDA said.