Farmers: Drought may result in rollercoaster prices in 2013 - KMOV.com

Farmers: Drought may result in rollercoaster prices in 2013

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By KMOV Web Producer By KMOV Web Producer

CAHOKIA, Il (KMOV.com) -- Wednesday News 4 spoke to a local farmer that says, the drought is going to affect food prices, but it doesn’t have to be as bad as you think.

The USDA is reporting the drought really shouldn’t affect grocery prices until 2013.

Even then, USDA says beef would see the biggest price jump at around four to five percent.

Milk products are forecast to increase at least three-and-a-half percent, With chicken and egg prices rising three to four percent.

Normal inflation is about 2.8 percent a year.

A Belleville area farmer tells News 4 he’s only seen six tenths of an inch of rain for the entire month of July. He says his corn crop probably won’t be saved by the little more rain expected in the next few weeks.

He’s not alone. Another concern is how the drought will affect what ranchers pay for feed, which could send meat prices on a rollercoaster ride.

“Probably the most dramatic thing you’re going to see is with these prices now with corn at around

$8 a bushel - guys that have hogs and cattle ready for market - they’re going to deliver those early rather than spend the money to deliver those right now,” said corn and soybean farmer Greg Guenther. “So I think in the short term you’re going to see lower beef, and poultry and prices. But then when those animals should have been marketed a few months down the road then, there won’t be as many so we’ll see a slight rise in prices there. But it’ll gradually settle back out again.”

Perhaps the biggest concern is that the extent of the drought is still undetermined. With the severe heat ongoing, conditions could continue to worsen.

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