Drought could lead to higher food prices
For Fridayâ??s Facebook Story of the Day, you wanted to know if this summerâ??s drought was going to have any impact on food prices and when we might begin to see those.
The livestock industry is taking a direct hit by this summerâ??s drought, and that will impact consumersâ?? wallets next year. The process will be slow, but experts predict that we could see a rise of eight percent in meat, dairy, and poultry prices over the next year.
Our current drought has drastically decreased the available feed for farmers, forcing many to start feeding winter hay several months early. On top of this, corn yields are likely to suffer as much as 10 percent compared to last year.
The livestock industry will experience a lot of short-term pain as it tries to adjust, forcing some producers to exit the industry. Producers are already culling and slaughtering their existing animal inventories to a level they can afford to feed.
â??If we were to repeat this in 2013, I really donâ??t want to think about what weâ??re going to do to the domestic livestock industries, weâ??re already going to a situation where if we continue to see dry weather, supplies of feed are going to come extremely tight. Weâ??re going to be forced in some cases to see some liquidation occur. So a backâ??to-back year like 2012 into 2013 is a very catastrophic event,â?? said University of Missouri Agricultural Economist Scott Brown.
Shrinking livestock supply will mean less meat in grocery refrigerators in 2013 and that will lead to higher prices for the consumer. Pork and chicken industries will fare worse because there are not many substitutes for their rations of corn and soybeans. The impact on producers and consumers will become worse if the drought continues into 2013.
â??If we look at whatâ??s happening at the consumer level, in 2013, again a situation where meats in particular, meats and dairy products may lead the way in mid-late 2013, carry into 2014. Similar things for dairy, so thatâ??s what consumers have to look forward to from the drought weâ??re currently experiencing,â?? Brown said.
The U.S. Department of Agriculture in August added nearly 220 counties in a dozen drought-stricken states to the governmentâ??s list of natural disaster areas. Nearly half of the nationâ??s corn crop was rated poor to very poor, according to the USDAâ??s Nationals Agricultural Statistics Service. About 37 percent of the U.S. soybean crop also rated in that category, while nearly three-quarters of U.S. cattle acreage is in drought-affected areas.
This is not good news as we approach the end of summer and farmers begin to harvest what is left of their withering crops.
University of Missouri is launching a new program to help increase high-quality cattle. This opportunity will be essential to help the cattle industry recover from the current drought. For more information head to http://www.quality-beef.com/.