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Sea Food Prices Rising Sharply

December 3, 1986

WASHINGTON (AP) _ Consumer prices for fish and seafood are up about 9 percent this year, the sharpest increase of any grocery item on the government’s shopping list, says an Agriculture Department economist.

Retail food prices overall in 1986 are expected to average 3.1 percent more than in 1985.

Fish and seafood are expected to show a similar 9 percent increase in 1987.

″At the same time, domestic consumption of fish has reached a record high level,″ said Ralph L. Parlett of USDA’s Economic Research Service. ″While demand for seafood is expanding, supplies of the more traditional species are diminishing.″

Parlett said in a paper presented today to the department’s 63rd annual outlook conference that the ″traditional species″ such as cattle and hogs are providing less red meat. In 1987 beef production may be down 6 percent to 7 percent, and pork production will be below 1986 levels most of next year, he said.

The demand for more fish and seafood has been going on for some time. In 1964, the per capita consumption was 10 1/2 pounds. By last year, the average American ate a record 14 1/2 pounds of fish and seafood.

″To satisfy growing demand, seafood processors and wholesalers are searching for new foreign sources of supply and are also promoting lesser known species,″ Parlett said. ″The supply situation is not likely to improve in 1987, and retail prices are expected to rise another 7 to 10 percent.″

Although per capita fish and seafood consumption could edge over 15 pounds in 1986, it still ranks far below beef, pork and poultry, which are expected to average 79, 58.3 and 73.4 pounds respectively this year.

Parlett said that with next year’s decline in red meat production, poultry producers will continue to expand. Some other consumer food price observations in his report:

-Dairy products will average in 1987 about what they did this year. Slightly lower prices for fluid milk sold in stores have been offset by higher prices for processed items such as cheese and butter. In 1987, with surpluses reduced and commercial use expected to increase, higher retail prices are likely by the end of the year. Even so, prices are not expected to average more than 2 percent above this year.

-Cereals and bakery products may go up about 3 percent, due to higher processing and marketing costs, the same as this year’s price increase.

-Fresh fruits and vegetables are up less than 3 percent this year, with larger citrus supplies helping to dampen price increases. In 1987, prices of fresh fruit could hold about the same as this year or rise by as much as 2 percent. Prices of fresh vegetable, however, might jump 7 percent to 10 percent in 1987, compared with a 3 percent gain this year, due to cutbacks in acreages this winter and higher potato prices.

-Fats and oils are costing less, meaning that retail prices for shortening, salad oils and margarine are down about 4 percent this year. With a large harvest of soybeans and continued large supplies of vegetable oils worldwide, retail prices also are expected to be down slightly in 1987.


WASHINGTON (AP) - Despite lower wheat prices in world trade, there is little indication yet that more wheat is being used, according to two Agriculture Department marketing specialists.

″Much of the growth in world wheat utilization in 1986-87 is due to higher domestic production,″ said Frank R. Gomme and Bruce R. Weber. ″Unfortunately, in a number of countries, consumers are unable to realize the benefits of lower wheat prices because of import barriers. If lower wheat prices are to work, we must work to eliminate these barriers, so wheat users everywhere can benefit from the reduced cost of wheat.″

Their comments were in a paper presented today to the USDA’s annual outlook conference.

Gomme and Weber said the world’s total wheat area is estimated to be the smallest in nine years but that this ″apparently will have little impact on the over-supply situation″ because the 1986 global harvest is the second largest on record.

But last year’s farm legislation which provided for lower supports on U.S. crops has already started to have some impact in countries that compete for the international wheat market. Mostly, they said, the impact has been the lower prices received for wheat.

″Lower prices should go far in stimulating export demand,″ they said. ″With the new price levels now in place, utilization should start to accelerate. It stands to reason that with world wheat prices down 20-30 percent, a buyer’s dollar goes further.″


WASHINGTON (AP) - Hog producers may still be a year or so away from significantly expanding production, according to an Agriculture Department livestock economist.

Leland Southard of USDA’s Economic Research Service says old debts are still bearing heavily on many producers and that it will take a longer period of profits before they can step up production.

Hog prices recently have been relatively high and feed costs low. In past years, Southard said in a report today at the department’s outlook conference, that has been a signal for expansion.

″However, due to the prolonged earlier period of poor returns and financial problems, sharp increases in pork production are not likely to occur before late 1987 or early 1988,″ he said. ″Even then, increases may be moderate, compared to historical standards.″

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