These factors, along with a modest dairy product demand, led to a 2.4 percent CPI increase in 1997. With milk output expected to increase slightly this year, retail prices for dairy products are forecast to increase from 0 to 2 percent in 1998. Fats and oils increased 0.9 percent in 1997 and are expected to increase a modest 1 to 3 percent in 1998. Since fats and oils are highly processed food items, their price change is influenced by the general inflation rate in addition to U.S. and world supplies of vegetable oils. Soybean oil is the primary oil used in the production of vegetable oil products, however the relationship between soybeans and the retail price of vegetable oils is complex.
Soybean oil is a joint product with soybean meal, which is primarily used for animal feed.
Total fruit-bearing acreage has increased steadily for the past 5 years. Citrus fruit acreage has expanded because of re-plantings in Florida, after a freeze in the late eighties, that have begun to bear fruit. These trees, which include oranges and grapefruit, will be producing increasingly larger crops into the early 2000's. California has also expanded its orange production areas with most of their crop going for fresh use, while the majority of Florida's oranges are used for juice. Summer fruits were also in abundant supplies in 1997, bringing about generally lower prices and expanded export opportunities for the U.S. fruit industry.