Experts warn of impending food price increases
February 21, 2013
The lingering effects of last summer’s drought — the largest in the U.S. since the 1950s — don’t appear to be dissipating any time soon. Quite the contrary, in fact, as many experts now warn of food price increases throughout this year.
Analysts with Great American Group Inc. report that overall retail food prices are likely to increase between 3 and 4 percent in 2013, which is above the historical average.
According to the National Climatic Data Center, about 55 percent of the country experienced at least moderate short-term drought in June 2012, for the first time since December 1956. It was compounded by a heat wave-laden July, which left farmers scrambling to save harvests.
The corn harvest in particular was dramatically reduced by the drought, affecting the cost of animal feed, which has spiked the cost of meat and dairy products. After reaching a high of $8.43 per bushel in August, corn prices softened in the remaining part of the year and into January 2013. Despite the recent decline, corn prices remain well above those of prior years.
To raise or not to raise prices?