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Food Costs Soar Following Severe Worldwide Drought
By
Nell Casey
Published Mar 18, 2014
Modified Mar 18, 2014
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By
Nell Casey
Published Mar 18, 2014
Modified Mar 18, 2014
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Food prices are expected to see their biggest annual increase in the past three years thanks mostly to devastating drought conditions all over the world. Dry conditions mean poor crop production; poor crop production means fewer livestock; and fewer livestock means higher prices for meats and dairy at the grocery store. That plus a pinch on products like cocoa, sugar, wheat, rice and especially coffee have the Bureau of Labor Statistics predicting a big bump in food costs.
Higher meat and dairy prices are mostly the culprits in the United States, thanks in part to ongoing drought conditions in the Midwest and Great Plains that have forced ranchers to cull their herds rather than pay exorbitant prices to feed the animals. Inflation of corn and soybean products could be managed if farmers receive favorable conditions for their crops this summer, in turn driving down prices of animal feed as well as products for human consumption. Still, consumers could pay as much as $1 more per gallon for milk at the store to compensate for low supplies mixed with high demand.
Drought conditions elsewhere on the globe will contribute to rising costs in many food products, including Arabica coffee from Brazil and cooking oils from Southeast Asia. Closer to home, severe drought conditions over 95% of California have affected water supply, which in turns affects production of both agriculture and livestock. Fresh vegetable prices are expected to rise up to 3% this year with fruit prices rising as much as 3.5%. Remember: avocados are a fruit.
Demand for all goods has increased in the past decade, but food prices have so far outpaced all other products. Last month the USDA estimated that retail food prices would rise between 2.5% and 3.5% in 2014, despite products like grain and corn seeing dramatic decreases in recent years. If drought conditions continue, those numbers could rise further. Many retailers and food service establishments may try to offset costs internally, but consumers should expect even bigger totals at the checkout counter and elsewhere if dry conditions continue.
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Bureau of Labor Statistics
drought
rising food cost
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Nell Casey
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