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U.S. Says Record Drought Will Drive Up Food Prices Next Year

HeadlineJul 26, 2012

A government forecast says the worst U.S. drought in about a half century will drive up the cost of food next year. In a new projection, the Department of Agriculture says food prices will climb 3 to 4 percent, with the price of beef increasing up to 5 percent. The scorching drought in the Midwest has ravaged fields and driven up the price of soybeans, wheat and corn, with domino effects on the cost of meat and other products. Economists fear the drought could impact global food prices since the United States is a major agricultural exporter. The Department of Agriculture, meanwhile, has added 76 counties in six states — including Wisconsin, Michigan and Kansas — to a list of natural-disaster areas due to damage caused by drought and heat. Nearly 1,400 counties have been designated as disaster areas in the 2012 crop year — more than 1,200 of them due to drought. The U.S. Drought Monitor last week found nearly 64 percent of the contiguous United States is in moderate to exceptional drought.

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