Drought to push up food prices in 2013: USDA

MINNEAPOLIS (AP) - The record drought gripping half the U.S. will help push food prices up by 3 percent to 4 percent next year, the Department of Agriculture said Wednesday.

Milk, eggs, beef, poultry and pork prices will all be affected by the drought, which has pushed up prices for feed. Beef prices are expected to see the biggest jump at 4 percent to 5 percent. Dairy product prices are forecast to climb 3.5 percent to 4.5 percent; poultry and egg prices are projected to rise 3 percent to 4 percent; and pork prices are expected to rise 2.5 percent to 3.5 percent in 2013, the agency said.

"In 2013 as a result of this drought we are looking at above-normal food price inflation. ... Consumers are certainly going to feel it," USDA economist Richard Volpe said.

Normal grocery price inflation is about 2.8 percent, he added, so even at the low end of the projected range people will see their grocery expenses rise more than usual next year. The USDA kept its projected food price increase for 2012 steady at 2.5 percent to 3.5 percent.

Watch: Drought drying up shipping routes along Miss. River
Watch: Cold Threatens Crops, Animals

The figures are the agency's first food price projections to factor in the drought, though farmers and others have been warning that prices will rise. The drought has sent corn, soybean and other commodity prices soaring in recent weeks as fields dry out and crops wither across much of the country's midsection.

Volpe said the drought is not expected to affect prices for fruits and vegetables. Most of those crops are irrigated. The USDA is projecting an overall 2 percent to 3 percent increase for all fruits and vegetables next year, the same as it expects this year.

USDA economists were aware of the drought a month ago when they did their last projections but didn't know how bad it would get, Volpe said.

"This drought was a surprise for everybody," Volpe said. "The USDA was forecasting a record year for the corn crop until this drought materialized. Now we're not going to get that."

Poultry prices will be the first to rise because of the drought because chickens and turkeys need only a few months to grow to market size, he said. Beef and pork take longer, and the agency actually revised its beef price projection for 2012 downward because producers are sending more cattle to the market at the moment as they reduce their herds in response to the drought, he said.

Meat and poultry prices are the most affected because feed prices represent the biggest part of their cost of production. Processed food prices are less affected by changes in commodity prices because ingredients typically make up just a fraction of their production costs.

[tubbie10]

The government better decide what is mnore important--worthless ethanol or food. I don't use ethanol cause my car runs like heck on it and the owners manual says not to use it. The ethanol plants use a heck of a lot of water that could be used to grow crops. The by-product, distillers grain, that is fed to animals has been banned as animal food in Canada because it contains e-coli. Isn't it time the government worked together instead of acting like a bunch of spoiled brats and did what it right for the country?

[ObamaBlackRobinHood]

Good!! I hope that gas prices go to $5 a gallon before November and I'm sure you speedbumps also know as Liberals will still vote for Obama in November because he's black. He's already placed one million more of you Liberals below the poverty line and will double that. I enjoy watching you idiots suffer because of your own stupidity.

[Ulgnud]

Stop cutting our gasoline with ethanol made from corn and we won't see a huge spike in food prices. (Unless the plan is to gouge us anyway). We might also get good quality gasoline again as well.

[FormerUSMCSergeant]

The top 2% who, benefit greatly from shooting down EPA proposals or neutering the EPA itself as repubs espouse, make bazillions ignoring global warming and care not the the income of the rest of us just dropped even more.

[guest173]

I appreciate your comments, sure would be nice if incomes adjusted as fast as inflation, but a lot of people need to raise up their personal standards instead of embracing thugness. More people would be better off finishing university Bachelors Degree minimum. Too many are happy to sit in prison and then go back to drugs when they get paroled. Have you seen how many Registered Sex Offenders there are in any given city? Too many, check your zip code in Map View and your area is full of dots. Too many people are happy to be stoned and stupid and letting themselves get taken advantage of by the rich by their willful ignorance and laziness.