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July 2, 2003

Food prices cool as weather heats up this summer, economist says

WEST LAFAYETTE, Ind. – Fourth of July and summer barbecues will be easy on the wallet this year, according to Purdue University agricultural economist Joseph Uhl.

"Moderating food prices are contributing to a relatively low rate of price inflation," Uhl said. "As the cookout season gets under way, food shoppers are seeing plentiful food supplies and lots of price specials.

"Retail pork and chicken prices are 5 to 6 percent lower than last year, making them an economical choice for holiday grilling."

Beef prices are slightly higher than last year because of continued strong demand, poor weather conditions in beef producing areas and the ban on beef imports from Canada. However, extensive specials on popular beef products will keep the steak and hamburger on the grill.

Lower milk and dairy product prices also are helping keep food costs down.

Supplies of watermelon, sweet corn, potato salad and baked beans, and other popular summer favorites should be more than adequate for the summer picnic season.

"Overall consumer food prices were unchanged in May after falling 0.3 percent in April," Uhl said. "Retail food store prices fell in five of the last 12 months."

The low prices are expected to continue. Uhl said this year's food price rise is expected to be one of the lowest in many years. He estimates an overall price increase of 2 percent. Food prices increased by the same amount in 2002 and showed a 3.2 percent increase in 2001.

Uhl attributed the summer food bargains to slower rates of inflation in food marketing costs, moderate consumer spending, intensive food industry competition and larger world food production.

Writer: Kay Hagen, (765) 494-6682, kjh@purdue.edu

Source: Joseph Uhl, (765) 494-4219, uhl@purdue.edu

Ag Communications: (765) 494-2722; Beth Forbes, bforbes@aes.purdue.edu; http://www.agriculture.purdue.edu/AgComm/public/agnews/

Related Web site:
Purdue Agricultural Economics Food Price Outlook


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