The severe drought, the worst since the 1950s, that has gripped the US means that food prices will rise 3 to 4 percent in 2013. The US Department of Agriculture has declared natural disasters in almost 1,300 counties in 29 states, about a third in the US. After initial predictions of a bumper crop, the corn harvest is expected to be the smallest since 2006.
The price of a bushel a corn is now $8, up 50 percent from where it was last year, as 88 percent of the corn crop has been affected by the drought. Poultry prices are expected to rise immediately (3.5 to 4.5 percent by later this year) due to the rising price of corn feed. Egg prices are also expected to rise (as much as 4 percent) and those for milk, pork and beef to follow next year. Dairy products are to increase 3.5 to 4.5 percent, pork 2.5 to 3.5 percent and beef, 4 to 5 percent.
As the US is the world’s biggest exporter of corn, global food prices are expected to rise this year, which could discourage “central banks from easing monetary policy,” according to a report from Merrill Lynch Health Management in Bloomberg.
Food costs are already up 1 percent this year and you can be sure that purveyors of burgers and sodas (corn being used as a sweetener for the latter) are watching prices, though Bloomberg reports that McDonalds had already brought meat and grain before the drought affected prices — fast food will remain as cheap as ever (and therefore a too tempting option).
The drought-induced higher food prices could cause unrest around the world. As Grist points out, “some Middle East experts say that rising prices even triggered the Arab Spring, providing a spark that ignited long-simmering tensions and resentments [PDF].”
In the US, though, those of us who don’t eat meat and dairy products may not be so affected by rising food prices. Fruit and vegetable prices have gone up due to frosts earlier in the year. But as Ray Gilmer, a spokesman for the United Fresh Produce Association, tells the New York Times, producers of fruits and vegetables have not been affected by the drought. “Most of these operations are irrigated and the water is highly regulated so we are not having issues with our crops,” says Gilmer. Could going meatless turn out not only to be better for the planet, but cheaper?
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