Food Prices and Supply
Kirk Condyles for The New York Times
Updated: July 26, 2012
In the summer of 2012, scorching heat and the worst drought in nearly a half-century sent food prices up, spooking consumers and leading to worries about global food costs. On July 25, the United States government said it expected the record-breaking weather to drive up the price for groceries in 2013, including milk, beef, chicken and pork. The drought has affected 88 percent of the corn crop, a staple of processed foods and animal feed as well as the nation’s leading farm export. The government’s forecast, based on a consumer price index for food, estimated that prices would rise 4 to 5 percent for beef in 2013, with slightly lower increases for pork, eggs and dairy products. The drought comes along with heat. So far, 2012 is the hottest year ever recorded in the United States, according to the National Oceanic and Atmospheric Administration, whose records date to 1895. That has sapped the production of corn, soybeans and other crops, afflicting poultry and livestock in turn. The impact of the hot and dry weather on the nation’s farmers has put new pressure on Congress to move ahead on a pending five-year farm bill. But House Republican leaders have been reluctant to act because of divisions within the party’s rank-and-file about the cost of the nearly $1 trillion bill. The legislation includes several federal agriculture programs that farmers have come to expect, though it does not include any specific drought assistance. Several important disaster relief programs expired at the end of 2011, leaving farmers and ranchers who have lost cattle or grazing land with few options without Congressional action. For now, analysts said they expected the broader economic impact of rising food prices to be modest. Americans spend just 13 percent of their household budgets on food. Economists fear a far greater impact outside of the United States because America is a major exporter of a...
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