Forecasting food prices can be tricky, especially in a climate like the one we are in right now. Last week, USDA raised its outlook for food inflation for the year.
It now says that prices will be 5.5 higher up from the previous prediction of 3 percent, but consumers and producers are wondering what kind of effect the conflict in Ukraine will have and so are USDA economists.
“I would be reticent to make any sort of comments about what’s going to happen in Ukraine,” USDA economist Matt MacLachlan states. “We will have to wait and see exactly what those impacts are going to be, but there are few scenarios in which we would think that this conflict puts downward pressure on prices.”
He adds that if wheat supplies around the world are reduced, the only scenario it is going to impose is upward pressure.
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The war in Ukraine prompts many questions for U.S. farmers