By Morgan Roan
University of Georgia
The economy is improving, and so is the outlook for your food
dollars. The food price index is expected to be about the same
as the 3 percent increase shoppers paid in 2003, said John
McKissick, an agricultural economist with the UGA College of
Agricultural and Environmental Sciences.
The price people pay for food is made up of more than farm
prices. It also includes the costs of labor, transportation,
processing, marketing and packaging.
If energy and fuel prices go up, so does the inflation rate.
And the price of food is largely determined by what’s happening
in the economy. The experts figure food prices will run
slightly behind the overall rate of inflation in 2004.
Meat products
“Beef prices are expected to decrease slightly, due in part to
the discovery of a single case of BSE (bovine spongiform
encephalopathy, or ‘mad cow disease’) in a Washington dairy
herd and the subsequent temporary loss of some export markets,”
McKissick said. “Even poultry prices may decrease slightly, due
to a similar event.”
Carbohydrates
Another food trend that affected last year’s markets will have
an impact this year: the increased demand for low-carbohydrate
foods. The Atkins diet has spread through the nation. There’s a
high demand for low-carbohydrate foods, McKissick said.
Since the demand for high-carbohydrate foods such as pasta and
breads is softer, the prices for these foods may drop
slightly.
“Orange juice and fruit sales were negatively impacted in 2003
because they contain a significant amount of carbohydrates and
sugars,” he said. The amount of carbohydrates a food contains
is a major concern for many dieters and will have an impact on
the food index for these products.
“Meat and egg prices went up last year,” McKissick
said, “partially because of the demand from consumers for
high-protein foods instead of foods containing carbs.”
Milk, fruits & vegetables
An increase in milk production will limit milk price increases.
But it’s “always difficult to predict the food price for fruits
and vegetables,” McKissick said, “because these crops are
determined by the weather patterns throughout the year.”
Fish & seafood
Prices of domestic fish products are low. Catfish and shrimp
are the most-eaten seafoods. “These products suffered last
year,” McKissick said, “and will continue to suffer this year,
from the producer’s standpoint, because of competition
abroad.”
Sugar
Sugar prices remain low and will likely stay that way.”Corn has
taken over a lot of the sugar market,” he said. “There won’t be
much change in prices.”
Eating out
The portion of the money you spend on food is often determined
by where you eat it. Families now consume more food eating out
than eating at home. “Well over 50 percent is consumed outside
of the home,” McKissick said. “This has been a 20-year trend
that will surely continue.”
(Morgan Roan is a student writer with the University of
Georgia College of Agricultural and Environmental Sciences.)
