2012 Drought Affecting 2013 Food Prices

A USDA economist says the persistent drought in the Midwest will lead to higher-than-normal food price inflation for the rest of the year. Ricky Volpe, USDA Economic Research Service, says, "It had substantial and devastating impacts on the major field crops of the American Midwest. The most important field crop there is field corn. Now, people don’t eat field corn directly, but it’s processed into animal feed and that’s a major input to the U.S. food supply chain so we’re seeing input costs rise for all the meat products and then all of these animal based products that consumers buy regularly. We’re looking at inflation on the order of about three to four percent for beef and veal, pork, poultry, eggs and even a little bit higher for dairy.

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