Drought to Impact Grocery Store Prices
UPI Business News -- July 23, 2012 -- Agriculture experts are warning that U.S. food prices will rise due to a widespread drought in corn and soybean growing states.The heart of the Midwest Corn Belt, is experiencing the worst drought it has seen in more than 50 years with prime crop areas that normally receive six to 10 inches of rain in June and July receiving less than two inches so far this summer, CNNMoney reported Saturday.
"This obviously will have an impact on yields," said Agriculture Secretary Tom Vilsack at a press conference at the White House this week.
As the drought drags on and the middle of the country bakes under a prolonged heat wave, prices for corn and soybeans have jumped.
December delivery corn futures reached $7.96 per bushel on Friday, close to the record price of $7.998.
September delivery corn, however, rose to $8.166 per bushel, matching that month's record.
November delivery soybean futures hit a record on Thursday, then rose another 2 percent on Friday to $16.902 per bushel.
Experts say prices for beef, poultry, pork and milk will be the most directly affected, while processed food prices will remain more stable, as a larger percentage of their prices are affected by packaging and advertising.
Senior Vice President of research for the National Cattlemen's Beef Association Michael Miller said prices for beef, poultry, pork and milk could rise 10 percent if the drought continues.
Corn is such a pervasive ingredient in the U.S. diet that food prices overall rise about 1 percent for every 50 percent jump in corn prices, USDA economist Richard Volpe said.
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