Biden Agriculture Chief Predicts Moderation in Food Inflation
Biden Agriculture Chief Predicts Moderation in Food Inflation
(Bloomberg) -- Agriculture Secretary Tom Vilsack predicted the jump in U.S. food prices in June will quickly moderate despite rising concern about inflationary risks in the economy.
“There are certain selective items in the grocery store folks may see for a period of time increased costs,” Vilsack said Friday in an interview on Bloomberg Television’s “Balance of Power” with David Westin. “We think this will even out as we begin to recover, as we begin to get the supply and demand in better balance.”
U.S. food prices jumped 0.8% in June from May, double the pace of the prior two months. Meat and poultry prices surged 2.5% last month, according to the U.S. Department of Labor’s consumer price index. Still, food costs are up just 2.4% from a year earlier, while overall inflation was 5.4% for the period.
Unilever Plc warned Thursday that global costs for raw materials that go into shampoo, detergents and ice cream are increasing at the fastest pace in more than a decade and have forced the company to scale back its profitability goals for the year.
Vilsack also suggested his department would soon announce proposed regulations to provide more protection to livestock producers in their dealings with the highly consolidated meatpacking industry. President Joe Biden’s executive order on competition instructed the Agriculture Department to consider stronger regulations.
“I think we will see significant action on that in the very near term,” Vilsack said.
Ranchers and cattle feeders have complained that prices meatpacking companies pay for cattle have barely budged even as the cost of beef at the grocery store has been soaring, repeating a pattern last year when Covid outbreaks closed or slowed some processing facilities.
Four large companies control more than 80% of U.S. beef processing and other segments of meatpacking also are highly concentrated. Tyson Foods Inc., the largest U.S. meat-processing company, reported record margins of 11% for beef in its second quarter.
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