Prices are rising for a range of food staples, from meat and pork to fruits and vegetables, squeezing consumers still struggling with modest wage gains.
Food prices rose 0.4% in February, the most since September 2011, the Bureau of Labor Statistics said Tuesday. Beef and veal shoppers were socked with some of the biggest increases, as prices jumped 4% from January.
Overall inflation remained tame, as falling gasoline and other energy costs offset the food price increases. The consumer price index ticked up just 0.1% from January and 1.1% in the past year.
Droughts, unusually cold winter weather, rising exports and a virus outbreak in the hog population are among the causes of food inflation, which is expected to accelerate in 2014. The Agriculture Department expects grocery store prices to increase as much as 3.5% in 2014, up from 0.9% last year. Among the foods most affected:
• Beef: The average retail cost of fresh beef last month was $5.28 a pound, up from $5.04 in January and the highest on records dating to 1987, according to the Agriculture Department and Sterling Marketing. Midwest ranchers thinned their cattle herds after droughts in 2011 and 2012 shrank pastures, says Sterling owner John Nalivka.
Other factors include small ranchers that shut down during and after the 2007-09 recession. There are now about 88 million head of cattle in the U.S., the smallest herd since 1951. Thus far, retailers have absorbed the bulk of a 22% beef price increase the past year, but Nalivka expects retailers to pass more costs to consumers this year.
• Pork: Retail pork prices rose 6.8% in the past year to an average $3.73 a pound in February as beef shoppers turned to cheaper pork options. But a virus outbreak since last April has killed about 6 million pigs, reducing the national herd by nearly 10%, estimates Steve Meyer, president of Paragon Economics. He expects the smaller inventory to boost per-pound prices to $4 by summer.
• Poultry: More expensive beef and pork have prompted some shoppers to buy chicken and turkey. Poultry prices increased 4.7% last year, the Agriculture Department says.
• Milk: The average price of a gallon of milk was $3.56 last month, up from $3.46 in October. The main reason: a surge in exports to China and other Asian nations, says Knox Jones of consulting firm Advanced Economic Solutions. Retailers have been hit by a 36% wholesale price increase since December, and Jones says per-gallon retail prices could rise another 25 cents to 50 cents this year.
• Fruits and vegetables: Unusually cold weather in California and a "citrus greening" disease in Florida have damaged citrus crops. Orange prices increased 3.4% last month, and strawberry prices are up 12% vs. a year ago. Analyst Michael Swanson says prices for other fruits and vegetables could spike this year, depending on the damage caused by California's drought.