With the Midwest struggling through the worst drought in nearly fifty years, grain prices across the country are spiking, raising the specter of increasing food prices in the midst of one of the worst recessions in recent memory.
Last week, Secretary of Agriculture Tom Vilsack attempted to reassure consumers that food prices would not increase until 2013 at the earliest. Despite these reassurances, consumers are beginning to worry as corn and soybean prices suddenly spike. Over the past five weeks, corn prices have increased more than fifty percent. December corn delivery contracts have already hit $7.960 per bushel with September contracts shooting past $8, an all-time high.
The increased prices are the result of the severe drought currently affecting most of the country. According to Secretary Vilsack, 78 percent of this year’s corn crop and 77 percent of the soybean crop and grown in regions designated as drought affected.
“This obviously will have an impact on the yields,” said Vilsack, during a White House press briefing. “Right now, we have indicated yields will be down about 20 bushels to the acre for corn and about 3 bushels to the acre for beans. That may be adjusted upward or downward as weather conditions dictate.”
Despite the increasing grain prices, experts predict that food prices won’t go up until the crops are harvested later this year.
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Written by: Justin Ellison / Farm Plus Staff Writer