U.S. Food Prices to Rise Due to Lingering Drought and Livestock Disease

Aug 01, 2014

According to a new report released by Euler Hermes, U.S. consumers should expect higher food prices on grocery store shelves, as drought and livestock diseases, like the pig virus known as PEDv, have resulted in tight commodity supplies.

Euler Hermes food industry expert, Umar Sheikh, calls the series of events that have lead up the phenomenon as the “perfect storm,” adding that drought, disease and the growing demand for exports, can be blamed for higher food prices.

Factors such as the current drought in California and the massive drought that occurred in the Midwest a couple of years ago, have put pressure on fruit, vegetable and meat products. “California grows about 50 per cent of the nation’s produce, and with disease of pigs in 27 different states that’s going to impact the pork supply,” he said. The U.S. cattle population is also the lowest that it has been in five decades.

Grocery store chains aren’t the only ones raising prices, restaurants are too. Fast food giants including In-N-Out Burger, hiked up prices for its hamburgers by 10 cents each, and drinks increased 5 cents, while french fry prices remained unchanged. Similarly, Chipotle Mexican Grill and Starbucks increased the prices on their menus, in the 4 to 10 per cent range.

To add to the pressure, export demands are increasing at a rapid rate. “Exports have been growing over the last several years,” Sheikh said in an interview with Farms.com. “Several countries including China, Turkey and Canada have seen about 20 per cent growth.”

In some counties exports have more than doubled, explained Sheikh, and that’s good news for U.S. growers, as it provides more market opportunities for their products, but on the flip side it has contributed to higher food prices domestically.

While Sheikh wouldn’t go so far to say that U.S. consumers should be alarmed by rising food prices, he did say that they should expect higher prices over the course of the next year.

Video: Dicamba Returns for Georgia Farmers: What the New EPA Ruling Means for Cotton Growers

After being unavailable in 2024 due to registration issues, dicamba products are returning for Georgia farmers this growing season — but under strict new conditions.

In this report from Tifton, Extension Weed Specialist Stanley Culpepper explains the updated EPA ruling, including new application limits, mandatory training requirements, and the need for a restricted use pesticide license. Among the key changes: a cap of two ½-pound applications per year and the required use of an approved volatility reduction agent with every application.

For Georgia cotton producers, the ruling is significant. According to Taylor Sills with the Georgia Cotton Commission, the vast majority of cotton planted in the state carries the dicamba-tolerant trait — meaning farmers had been paying for technology they couldn’t use.

While environmental groups have expressed concerns over spray drift, Georgia growers have reduced off-target pesticide movement by more than 91% over the past decade. Still, this two-year registration period will come with increased scrutiny, making stewardship and compliance more important than ever.