What Can We Expect from Food Prices

Sharon July 19th, 2012

Depending on whose measure you are taking, somewhere between 55 and 62% of the US is in moderate-to-extreme drought.  The US corn crop is likely to be seriously affected as Stuart Staniford documents with his usual meticulousness. The big question – what does this mean for food prices and availability going into the coming year?  Spikes in corn prices are already occurring, with a range of likely impacts – some of which our obvious (more expensive Fritos and Beef) and some of which aren’t (more dairy farmers going out of business as feed prices exceed the price of milk).

The worst effects probably won’t be in the US – but will emerge as already high global food prices squeeze out the folks who most depend on grains – the ones too poor to burn them in their cars and eat them as meat, but who eat the grains to live.  Predicting the future is a delicate game, but we can expect to see the impact for some time to come, playing out as always in complex ways.

Higher food prices, along with continued economic instability in the US are likely to push a lot of us hard as well.  We, folks, are living in interesting times.

What does this look like from your view?

Sharon

13 Responses to “What Can We Expect from Food Prices”

  1. Mary Walker says:

    Looks much the same to us here. We expect food prices to go up as they have been for the last few years. We have eliminated most of the highest priced items like the highly processed mixes, meals and such and those that contain a lot of high fructose corn syrup. We decided to stock up on meat a bit earlier than we normally would have–this month rather than September or October. I imagine that the most severe effects will be among those populations already hard pressed by previous high prices. Worse our drought isn’t the only weather related agricultural disaster in the world. Floods in northern India, record drought on the Korean peninsula, dry conditions in areas of South America and locust infestations in the western Sahel where the Sahara is expanding. Interesting times indeed.

  2. It just cements in my mind our need to build strong local food systems, not only farmers but actual consumers producing and sharing their own food. For example, much of the country is in an extreme drought but in my area it has actually rained almost every day for two weeks. If we didn’t depend so much on crops coming in from other areas we’d be fine. Hey, maybe this will actually force us to think more about where our food comes from, and that can’t be a bad thing, can it?

  3. aimee says:

    It won’t affect our meat supply much if at all, because we eat our own grass fed animals or buy from our neighbors. However, I have already noticed that certain staples are increasing rapidly in price, notably cooking oil and legumes. Animal feed has also spiked – which does affect us as we keep several goats and a double-handful of chickens through the winter. I have actually switched the goats feed from a brand name goat food to simple cob with molasses. A 50 pound bag of goat food is now over twenty dollars, compared to thirteen dollars five years ago. I guess it does affect our meat supply, after all!

  4. Jenn says:

    I’m in Canada, but we’re facing adverse weather here too – hot with very little rain, much like what’s going on in the US. It’s a problem in itself, but given that we’re so reliant on the global commodities market, we’re facing the same rising prices as everyone else. Even at the farmer’s market, prices tend to be up from last year since supply is down, and we can certainly see it in the grocery store, where our bills are more expensive than they used to be. I’ll be out tomorrow stocking up on some items to add to the pantry, since they’re on significant sale and it makes such a huge difference to the bill now.

    The other problem is that we also had the same early thaw that affected a lot of other regions. A week or two of early and unseasonably warm weather meant that a lot of fruit trees bloomed, but were then killed off by frost. There’s been an estimated 30 to 40 percent loss (if not more) in terms of fruit yields for this year, which will just make things more difficult.

  5. Rebecca says:

    I just returned from a family visit to Elkhart Co., Indiana. Our farmer relatives look shell-shocked. Horrible!

    We’re new to our farm here in PA and have been moving fields out of corn and into pasture. We’re still buying hay from a neighboring farm because we want our soil to have a few seasons of grazing/mowing before we harvest our own hay. I’m expecting stiff competition (and high prices) for the hay to feed our cattle over winter. According to a local Big Farmer, there is already high international demand for US hay and now the poor Midwest and West….

  6. Nicole says:

    Beef probably won’t go up much if at all this year because so many range farmer’s are selling their stock since they can’t feed them, and the feed lots have contracts on corn and soybean prices.

    Other corn and soybean based food is hard to tell. Most people buy processed food, and the price of the actual *food* is a pretty small proportion of the price. Manufacturers try to absorb prices to keep their product line stable and competitive — if they decide they have to raise prices, they’ll do it across the board. $4.25 for a box of cereal instead of $4. Manufacturers bumped prices last year, so they may be able to hold off.

    All of this will affect me very little. I already bought my beef for the year (local, grassfed) and have a contract for my chicken prices for the rest of the season. When I buy pork this fall it may go up. I don’t have to buy any feedstock myself, so my actual purchases of commodity crops aren’t much.

    I predict that this year more hunters will make the trek to southern Alabama and avail themselves of the feral pig that the state and conservation groups keep asking people to hunt. It’s a lot of meat available for a $16 license and a year-round season.

  7. Annie Kelley says:

    I’m in the corn belt portion of the poor Midwest. We have had terrible drought conditions and blazing above normal temperatures. We are now on about our 3rd consecutive week of 102+ temps.

    The farmers are losing their crops, The fields are dry as a bone as much as 2 feet deep. The governor here has been making trips through the southern part of the state and declaring emergencies.

    My garden is being kept alive by sheer will power, lol. I water about every other day and sometimes daily, depending on the forecast. We grow organically, of course, so our plants are healthy, and we mulch within an inch of our lives, which helps with root protection and water conservation. My edamame crop is looking great, so that will provide a good protein source. My lima beans are good as well. Next year I will plant even more beans…

    We only eat meat once a week or so, so that won’t affect us too much. I’m stocking up on canned fish (tuna and salmon) and if I find a deal on chicken breasts, I may can some more of those, although I still have a dozen jars or so from last time.

    It’s gonna get real….

  8. c. says:

    It’s gonna get real…..

    That. Echoes. In. My. Head.

    All I can say is thank you for my hippie parents. I worry about how many people I can care for – not enough land.

  9. Pat says:

    We’re having drought here in Oklahoma … all my farmer friends are complaining about the lack of rain and rejoicing when we get a few drops. I belong to a food cooperative and yesterday was our pickup day — more people than usual have been buying cases of fruits and vegetables, I’m assuming to put up for later.

    A friend gives classes on foraging and last week had a wildcrafting festival (I spoke on how foraging can help with prepping) and the place was packed. All us regulars were astonished at how many people came out. There’s definitely interest in learning how to cut food costs.

  10. Claire says:

    I agree with the person above who suggested buying meat now and storing it, that meat prices probably won’t rise much and may drop for a few weeks or months as herds are slaughtered to make the number of animals more in line with the feed supply. I’d expect to see higher meat prices next year. Whether or not processed food prices go up is harder to say.

    Recall that a significant portion of the corn crop goes to make ethanol for vehicle fuels, and a significant part of the soybean crop goes to make biodiesel. Competition for each crop between agribusiness and fuel companies is likely to increase prices more than they would otherwise. Do we feed vehicles, or animals and people, on this smaller harvest? I’m not looking forward to finding out the answer.

    We drove to the PA-NJ area twice for two weddings two weeks apart. For us this means taking I-70 across IL, IN, and OH to the PA Turnpike, running us through the heart of the drought. I nearly cried to see how dry the fields were and how poor the corn crop is all along I-70. How many farmers will be ruined by this drought?

    Because our garden has been so successful and we’ve been out of town for almost two weeks in the past month, I’ve barely been in a grocery store in the last couple months so have had little opportunity to determine any effect on prices. I was shocked at what seemed to me to be exceedingly high prices for fast food meals at the rest areas on the PA Turnpike. But that could be (a) because I haven’t bought fast food for years, so I have no way to know if the rise in price has been recent or not or (b) because the rest areas have a captive audience on the Turnpike (it would cost extra to get off at one of the exits), they can hike prices beyond what the same place off the Turnpike would charge.

  11. Marija says:

    I scaled back the variety in my garden this year and planted only potatoes, tomatoes, corn, and beans. Lots and lots of beans. I also signed up with a CSA and have been getting lovely greens, onions, squashes, and all the normal vegetables weekly, so I don’t have any need to go to the grocery store except for the occasional purchase of cheese, rice, or coffee.

    I usually buy in bulk when there’s a good sale, and so have pasta, canned vegetables, olives, etc. stored away. And I’m still working through last season’s canned and dehydrated vegetables.

    I read a book recently called “Buffalo Bird Woman’s Garden,” written by a Native American women in the 1880s. Her family made a practice of putting up enough food for two years in case they hit an off year. That’s why I decided to scale back my variety this year and concentrate on putting up a lot of corn, beans, and potatoes this winter. They’ll all be good sources of protein.

    I’m a vegetarian with a sensitivity to soy, so I have to avoid most processed foods. I haven’t yet noticed food prices going up in my area (Maine), and no drought here at all, thank goodness. My heart breaks for all the farmers facing cloudless skies every day, and all the animals being slaughtered prematurely.

  12. NM says:

    Ditto to Marija’s sadness.
    Focusing hard on the winter garden this year.
    Ironically had decided to scale back on the canning this summer; am tired, and can’t seem to muster much enthusiasm. But will definitely be putting up the staples, and am thinking about canning or freezing some meat for pet food.
    Definitely have noticed the price increases over the past four or five years, and am wincing at the thought of more, even knowing that most countries pay quite a bit more than we do.

  13. Two things I’ve noticed recently. The price for the 80# bag of chicken feed that I buy has jumped from $23 to $32 within the last six months. When I started buying it 5.5 years ago, the price was $18. This is “transitional” organic feed, usually grown entirely by the Mennonite farmer I buy it from. But demand has gone up and he’s been buying organic components of the feed on the open market. He doesn’t really expect the price to come down any time soon.

    I happen to know that the two farmers I most often buy meat from get their feed from the same place I do. So I know their costs are going up just as mine are. This makes me very glad I have six broiler chicks in the living room and plans to start a few turkeys in a week or so. I don’t know that other meat is going to feature much in our diets.

    Also, I buy bread in the summer when it’s just too hot to do much of my own baking. The prices for bread at the farmer’s market are stunning. Admittedly the stuff I buy is made with organic flour. But we’re talking upwards of $6/loaf, and for not all that large a loaf. Because I rarely buy bread except in summer, I don’t have much sense of how quickly the prices have changed. Still, it’s pretty shocking. Needless to say, I’m getting by with less bread and making naan on the bbq every time we grill for dinner. The potatoes are just starting to come in, so there’s a good alternative to toast with breakfast. Doesn’t really answer for PB&J though.

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