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Food Prices Expected To Spike, But Relief May Be In Sight

While economists fear what rising food costs might do to a weak global economy, they predict prices will fall by the end of the year.

This year's drought in the Midwest is the worst the region has seen in fifty years. Decreased production in the region is driving up food prices.

Freak Weather Worldwide

The current Midwestern drought is the most severe the region has seen in fifty years, and its effects on corn, soy and wheat farms have been devastating.

But the US is not the only place with meteorological problems.

While South America is also suffering precipitation deficits, the UK is experiencing record rainfall.

The same goes for Russia, where the wheat crop has been devastated by flash flooding. Experts fear this may inspire the nation to decrease its wheat exports, tightening supply and raising prices the world over.

Thanks to all this weather weirdness, everything from bread to corn-fed meats is going to be more expensive.

International Disaster

Because having a lower income makes for a reduced ability to adjust to unexpected expenditures, spikes in the cost of food tend to impact poor nations more profoundly than richer ones.

In many developing countries, people are still in debt as a result of the 2008 and 2011 food crises. Economists fear the current spike could exacerbate the ongoing global economic slump.

Calm Beyond The Storm, Analysts Predict

There is some good news, however.

A survey of nine analysts predicted that although short-term food prices will almost certainly climb in the coming months, they will likely sink back down as much as 19 percent by the end of the year, as traders turn their sights southward in anticipation of 2013.

Read More:

  • Food Price Crisis Feared As Erratic Weather Wreaks Havoc On Crops (The Guardian)
  • High Food Prices Will Hurt, Not Kill, China’s Economy (MarketWatch)
  • US Grain Prices Seen Easing, Tempering Food Inflation (Reuters)
Sarah Gordon

Sarah Gordon has been interested in food ethics since she was 15, learned about industrial slaughter, and launched into 10 years of vegetarianism. These days, she strives to be a conscientious omnivore. Now a PhD candidate in folklore, her research has caused her to spend a lot of time in the remote Canadian sub-arctic, where the lake trout (sustainably harvested) tastes amazing.

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