Severe Drought Will Serve Up Severe Food Bill in 2013
The U.S. National Weather Service says that relief from the drought won't be easy: it estimates that 10 inches of rain is needed to protect food crops across the Midwest. But the service doesn't see more than one inch of rain in its most recent outlook (through the first week of August.)
If there is any upside to the USDA forecast, it's that the real damage in higher commodity prices doesn't come until 2013. That's because there's that "lag" effect that Volpe cited.
"The transmission of commodity price changes into retail prices typically takes several months to occur, and most of the impact of the drought is expected to be realized in 2013," he added in a research note that accompanied the department's outlook.
Consumers can expect to see higher prices for basic foodstuffs like eggs and milk, beef, corn, butter, cheese, ice cream, cereal and bakery products, and fruits and vegetables, the USDA reports, all related directly or indirectly to drought conditions.
Higher food prices are another tough break for consumers, who have no choice but to dig deeper and pay up for their favorite ice cream, or for that cheeseburger down at the local lunch diner.
As if consumers didn't have enough on their plates.
--By Brian O'Connell