- Category: Food Prices
- Last Updated on Friday, 14 December 2012 08:17
- Written by Seraphim
Overall Meat Prices Up +40% since 2002
The effects of the drought in the US Midwest on food prices are going to be long term and they're going to be global though consumers won't begin to feel it until at least 2013.
Consider the facts: As of July 2012, crop yields are the lowest they've been since 1988. The drought now covers three-fifths of the US, the number of states impacted has doubled in just the last three months.
Direct affect: 50% increase in corn prices --> 1% increase in food prices
US corn production in bushels : was suppose to be 14 billion, now only 11 billion.
USDA says food price inflation will be 4% in 2013 after being only 3% in 2012 (3% is the long term average so that's not unusual but 4% is).
Largest pork producer is looking to Brazil to feed its corn needs (Brazil is the world's #3 producer of corn).
Good News for 2013: Inflation in processed meats and fruit (already properly irrigated) won't be as severe because food costs aren't a major contributing factor to their pricing.
--> Note: Brazil uses the Real NOT the Dollar as I mistakenly called it in the video. It's easy to confuse the two; Like the dollar, Brazil's currency is also denoted by $.