Because of the scope and severity of last years drought most food analysts had projected that food prices would average 4 1/2% to 6 1/2% higher in 2013. So far that has not happened, at least for most commodities. Now because of demand and the drought induced liquidations we've seen in the beef industry, beef prices have been up this year. However all other commodities have not risen at the rate that had been expected and according to a recent USDA report it looks like food prices may actually run below average inflation level of 3 1/2% this year
Commodity groups hope this news will lead to better retail sales for the last quarter of the year and y will result in stronger producer returns. That coupled with projected lower input costs especially on the feed side could improve producer and grower margin beyond the modest level they have been for the first half of the year.