A recent study by a Penn State University researcher in the School of Agricultural Sciences suggests that farmers are facing more severe consequences to food price increases than most consumers are, and that many of the problems and costs facing the farm community will eventually be passed onto the consumer.

For the past few months, farmers across the country have been caught in an ongoing and rapidly worsening drought. About two-thirds of the country is experiencing some level of drought, with roughly one-third suffering from severe to extreme drought conditions. The record high temperatures and lack of rainfall are doing significant damage to crops across the country and some farmers are anticipating crop losses of up to 80 percent.

According to Penn State professor James Dunn, “The impact is really going to be on the farmers,” he said. “Corn and soybean producers will have nothing to sell, and livestock producers will have very expensive inputs. Consumers can adjust because they eat a variety of foods. Cows don’t.”

In addition, he added that a significant portion of food prices is not principally related to the cost of crops. The retail value of the wheat in a loaf a bread, for example, is about 3 percent of the final cost, meaning that if the cost of wheat doubled, the price of bread would increase by 3 percent, well below the expected 14 percent increase in food prices.

A major part of the anticipated price increase is the U.S.’s ethanol mandate, an Environmental Protection Agency policy requiring that a certain percentage of corn grown be directed to the production of biofuels.

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Written by: Justin Ellison / Farm Plus Staff Writer