Lower Oil Prices May Temper 2015 Food Price Inflation

Feb 18, 2015

Oil prices began declining in the last quarter of 2014, continuing their descent to just above $45 a barrel in January 2015 from $105 in July 2014. Barrel prices have not dipped this low since the end of the Great Recession in 2009. Through their impact on transportation costs and the cost of operating farm machinery, oil prices play a role in retail food prices, and declining oil prices could ease grocery store inflation.

However, the effect is likely to be modest because processing costs and retailing overhead are larger cost components of retail food prices. Prices of foods requiring little processing, such as fresh fruits and vegetables, are more likely to be affected by lower oil prices than processed foods such as cereals and bakery products.

As oil prices fell in 2009, fresh produce prices decreased 4.8 percent, while prices for cereals and bakery products rose 3.2 percent. Despite lower oil prices, ERS currently predicts overall food prices to rise between 2 and 3 percent in 2015, closely in line with 2014 food price inflation.

Source:usda.gov

Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.