Midwest droughts will raise the price of food

Severe droughts have damaged much of the nation's feed grain crops. That will drive up the cost of groceries, says the USDA. Image: iriskh/Flickr/CC BY-ND

Later this year, says the U.S. Department of Agriculture, American consumers will begin seeing the cost of food rise in response to severe droughts in the Midwest.

‘Natural disaster in slow motion’

The devastating droughts in the Midwest this summer have severely damaged crops of corn, soy beans and other feed grains. That, in turn, will have a great impact on the consumer costs of a variety of food products.

But the effects won’t be noticed immediately. John Anderson, deputy chief economist at the American Farm Bureau Federation, said:

”We expect the impact on feed prices to be widespread and significant. 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.”

According to the federal agency, price increases will start being noticed by consumers on some items in November or December.

Impact in the grocery aisles

American consumers are concerned about how the drought will affect their food budgets. According to a recent Harris poll, 94 percent of those surveyed said they were “somewhat” concerned about rising food costs as a result of the droughts.

And according to the USDA, they probably have reason to be. In spite of federal assistance efforts, the agency predicts that shoppers can expect to pay an average of three to four percent more for groceries next year.

Dairy products may go up from 3.5 to 4.5 percent, said the USDA. Pork could climb by 2.5 to 3.5 percent. Consumers could spend three to four percent more for poultry and eggs. And beef prices could go up as much as four to five percent.

The cost of corn

The deficit of feed corn will raise the cost of feeding cows, pigs and chickens, and those costs will be reflected in consumer prices. In addition, the cost of milk and other dairy products will rise for the same reason.

The USDA said the cost of pre-packaged and frozen foods will also go up, but that difference will not be noticed for about a year.

Ironically, the cost of fresh corn on your table may not be affected. Consumer-grade sweet corn is produced differently than feed corn, and has not been hit nearly as hard by the drought.

Most counties disaster areas

More than 1,500 U.S. counties in 32 states have been declared disaster areas, due to the severe drought conditions. That is more than half of all the counties in the nation. Agriculture Secretary Tom Vilsack said last week that there will be federal assistance made available for farmers and ranchers who have been impacted by the drought. In addition, insurance companies have agreed to give farmers and ranchers a grace period of 30 days to pay their premiums.