Drought Pushing Grocery Prices Higher

By: Lindsay Veremis Email
By: Lindsay Veremis Email

Some are calling this the worst drought since the late 1980's and the soil might not be the only thing drying up, try your pocket book.

Grocers say you could be spending more for a wide variety of products.

"You're at the mercy of the markets, what the farmers have is what they have," Steve Antaya, Vice President of Tom's Food Center said. "You try and source the best that you can at the lowest price that you can but that's sometimes swimming against the current."

The U.S. and Michigan corn crops have already seen permanent damage and in some areas yields are beyond hope.

"The corn supply touches almost everything in the store, I mean obviously the fresh corn that people buy, the frozen corn in the frozen aisle, but beef and other things," Antaya explained.

He says corn contributes as feed, or is a raw ingredient in 75 percent of products at Tom's Food Center.

"It means the price increases are coming whether we talk about immediately with fresh items, or somewhere down the road, whether it be the next six months to a year with a lot of other items," Antaya said.

But before we get to that point, consumers may see the cost of some products going down. For example, beef and pork prices will likely drop as farmers slaughter herds they can no longer afford to feed.

Keep in mind, experts say that consumer upside will be shortlived.

"Those animals aren't going to be in the pipeline down the road, so if we don't get some relief we're definitely going to see some higher prices," Bob Boehm, Manager of Commodities and Marketing with the Michigan Farm Bureau said.

Still, Boehm adds that shoppers will be somewhat insulated, because it is not just raw ingredients factoring in to prices on the shelf. Transportation, manufacturing and packaging matter too.

"It's certainly going to raise them," he said. "But it isn't going to be dramatic."

It will also take some time to hit your table. The USDA isn't expecting increases until next year.

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