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Food price expected to increase slightly for 2004

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."


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 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.)

(Morgan Roan is a student writer with the University of Georgia College of Agricultural and Environmental Sciences.)

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