MONTGOMERY, AL (WSFA) -
Consumers could be paying more for groceries later this year. Food prices are expected to go up and serious drought conditions are to blame.
This summer's drought has hit some Alabama farmers hard, threatening crops that need a lot of moisture. But it's not just affecting local farmers. The drought is gripping more than half the country and covers around 60 percent of the continental U.S. It's the largest drought-stricken area since the epic droughts of the 1930s and 1950s.
The U.S. Department of Agriculture has already predicted that people will pay three to five percent more for groceries next year, especially for things like milk, eggs, chicken, beef and pork. When dry conditions create bad crops, it drives up the price of feed. That means livestock are not eating as much and the less they eat, the less they produce, leading to less supply.
Experts say that three to five percent is significant, because it is above the rate of inflation. Industry leaders expect that consumers will have to make some tough spending decisions because of the increase.
Bob Robicheaux of the UAB School of Business says, "if you have three and half to five percent increase on food milk, bread that means you'll have to take away from something which is probably going to be recreation and entertainment."
Consumers shouldn't see this increase right away, because food makers buy in advance and lock in prices, so prices will remain the same for now. Higher prices are not expected to kick in until next quarter and early 2013.
Copyright 2012 WSFA 12 News. All rights reserved.
All content © Copyright 2000 - 2013 WorldNow and WSFA, a Raycom Media Station.
