New Year brings higher prices on certain goods

New Year brings higher prices on certain goods (Image 1)

Congress was able to avert the U.S. crashing over the Fiscal Cliff, but it will not keep consumers from seeing higher prices when they go to the grocery store and other places.

According to the U.S. Department of Agriculture, food prices will rise between 3.5% and 4% in 2013.

A drought over the summer led farmers to thin out their herds because of a shortage of available feed corn and grass.

That will lead to higher beef and chicken prices. The USDA said it will also mean higher dairy prices because fewer cows mean less milk is produced.

Copper is also expected to rise in price. That could affect people in a number of places since copper is used in a variety of items including pipes, wires, kettles and in equipment used to distill liquor and brew beer.

The cost of liquor and beer are also expected to rise as a result.

Some businesses are already planning for the price increases. Wendy's announced Wednesday that it would change it its $.99 value menu as a result of increased food costs.

The new menu called “Right Price, Right Size” will feature items priced between $.99 and $1.29. Other fast-food chains like Burger King and McDonald's have made similar changes.

At small businesses like Canvas Lounge on Church Street in Nashville, raising prices has been something owner Darek Tanner has tried to avoid.

“I have kind of just weathered the small percentage increases because I don't want to scare any customers,” Tanner said.

Since he opened his business just more than two years ago, he has been able to expand his staff and food menu.

Now he is considering an increase in the price of drinks at his bar to keep up with his increasing overhead.

“It would be nice to say I am going to absorb these prices and keep my prices the same, but that is just not realistic,” Tanner said. “If one thing goes up kind of everything goes up.”

Other areas where costs are expected to rise include health care premiums where some estimate employees will see an up to six percent increase.

College tuition is also expected to cost more as cash strapped states reduce the amount of money they provide to universities.

High-end TVs are also expected to cost more as well as some cell phone accessories, specifically for Apple products.

Some good news experts expect some things to cost less in 2013.

That includes certain electronic games, smart phones and gas prices.

The cost of oil is predicted to drop from $100 a barrel to $70 a barrel in 2013.

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