The department expects retail beef prices to rise 3 to 4 percent this year. Overall, food prices are expected to increase by nearly 2.5 percent, less than the overall cost of living, Clauson said. Vegetables are likely to cost 4 percent more this year because growers have cut back on acreage, but fruit prices are likely to be down because of overproduction of apples and other crops. Because of a drought on the southern Plains, this year's harvest of winter wheat is forecast at 1.34 billion bushels, down 14 percent from last year. It would be the smallest crop in 23 years.
Winter wheat is planted in the fall and harvested the next spring.
Soybean production is expected to hit a record 3 billion bushels this year, an increase of nearly 8 percent over last year. Farmers have been planting more soybeans, partly to take advantage of favorable federal subsidies. The projected price declines likely will increase pressure on Congress to approve a fourth straight year of supplemental farm assistance. Farmers have been cutting back on wheat plantings for several years and switching to more lucrative crops such as soybeans. This year, much of the nation's winter wheat crop is in relatively poor condition.