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Will Drought Increase Food Prices?

The Secretary of Agriculture says the drought alone, is not enough to cause a big spike in food prices.

corn

Photo: Alternative Heat (Flickr)

Some say food prices will go up because of the drought's impact on the state's corn crop.

There is some debate about whether food prices will go up because of the dry summer.

Secretary of Agriculture Tom Vilsack says he does not expect food prices to jump much at all because there are so many factors that affect prices besides just the weather.

“Farmers only get 14 cents of every food dollar that goes to a grocery store, so commodity prices can rise dramatically, and it will have, and should have very little impact, if you will, on food, we‘re expected food inflation to be somewhere between 3 and 4 percent next year,” he says.

Congressman Marlin Stutzman, who owns a farm in North Eastern Indiana, says he says it is too soon to say for sure, but he thinks we could end up paying a lot more for groceries, because of the worry about drought-stricken fields.

“I think there is going to be a spike in food prices because you are going to have a lot of speculation built into the market because people are assuming the drought is going to greatly affect the corn crop,” Stutzman says.

Stutzman says even before the grains are collected, market speculation might cause grain prices to spike, which will boost your grocery tab.

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