Food costs are going up and the U.S. Department of Agriculture is increasing its forecast for how high those prices will go this year. For all food purchases, the increase is expected to be between 2 and a half and 3 and a half percent this year — up a half-percent from last month’s estimates. Grocery store prices are expected to increase between 2 and 3 percent this year with restaurant prices going up 3 percent to 4 percent.
We’re not going to run out of milk anytime soon. The latest USDA numbers show the dairy herd across the country is growing. In February, dairy farmers added 13,000 cows to the herd—in March it was 14,000 and in April the herd increased by 26,000 head. The May increase was 5,000 animals but that increased the national herd size to 9.5 million head — the biggest dairy herd we’ve had since 1994. In May the herd was up 145 thousand from a year ago — the largest year to year increase since 2008.
USDA economists will release their June Grain Stocks Report later this morning. The numbers will include the department’s planted acreage estimates for this year. Their initial estimates were 91.1 million acres for corn, but many in the grain trade feel that number is too low so they expect today’s estimates will move that number up to just over 93.8 million acres, meaning a corn crop of more than 15 billion bushels. That would put ending corn stocks for June at around 4.2 billion bushels — down from 5 billion a year ago. Soybean acres also are expected to go up in today’s report — from 87.6 million acres initially to 89.15 million acres in today’s report. That would mean a soybean yield of about 4.4 billion bushels which would be just enough to meet early demand estimates from the USDA. Last year’s June soybean stocks were almost 1.4 billion bushels but increasing demand has that number at 795 million bushels this year.
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