Buckle Up For High Food Prices

Start clipping coupons and watching for deals. Food prices are going to shoot up in upcoming months due to an epic drought that has already reduced a quarter of the projected corn crop, market prognosticators say. In fact, corn prices have jumped by 30% in the last month, and it’s only going to get worse as dry conditions ravage the U.S. Corn Belt.

Consumers don’t realize that corn is a major player in food production, as corn is a main ingredient in many goods commonly purchased in the grocery store. As ranchers are forced to sell their livestock and feed prices rise, purchasing meat will also be hard on the budget.

USDA recently reported that Americans should expect food price hikes of 3-4% next year, with beef prices going even higher. Poultry and egg prices are projected to rise 3% to 4%, while dairy prices could climb as much 4.5%.

”American families already have stretched their budgets because of the tough times, so these price increases will hurt harder than they would have five years ago,” says Ben Senauer, a professor of applied economics at the University of Minnesota, in an interview with the Eureka, CA Times Standard. “Broad areas of this country are drying up as we speak. This is not being exaggerated at all; it's bad out there. And with every day of high temperatures and no rain, it's getting worse.”

”We expect the impact on feed prices to be widespread and significant,” added John Anderson, deputy chief economist at the American Farm Bureau Federation. “We talk about most natural disasters, like a hurricane, at a fixed point in time where you clearly see what's happening. But that's not how a drought works. It's more like a natural disaster in slow motion.”

Read the complete article here.

Are you tightening up your budget in preparation for a rise in food, fuel and livestock feed? Is your operation and your family already feeling the pinch? How are you managing your finances during this drought?

Check out our drought resources page here.