Food, Drought | featured news

Bacon lovers can relax. They'll find all they want on supermarket shelves in the coming months, though their pocketbooks may take a hit. The economics of the current drought are likely to nose up prices for bacon and other pork products next year, by as much as 10 percent. But U.S. agricultural economists are dismissing reports of a global bacon shortage that lent sizzle to headlines and Twitter feeds last week. Simply put, the talk of scarcity is hogwash.

David Frum says the drought is driving up world food prices, and history suggests that is likely to produce unrest within poor nations. Prediction: 2013 will be a year of serious global crisis. That crisis is predictable, and in fact has already begun. It will inescapably confront the next president of the United States. Yet this emerging crisis got not a mention at the Republican National Convention in Tampa. We'll see if the Democrats do better.

Though severe drought conditions have raised the cost of food this summer, consumers may have seen the worst of the price impact at the grocery store. Higher food prices helped lift the closely watched Producer Price Index by 0.3 percent in July, the fastest pace in five months. At the same time retail sales rose 0.8 percent, the first increase in four months and well ahead of expectations, signaling that the sluggish economy may be picking up momentum.

Leading members of the Group of 20 nations are prepared to trigger an emergency meeting to tackle soaring grain prices caused by the worst U.S. drought in half a century and poor crops from the Black Sea bread basket.

The punishing Midwest drought is expected to reduce the nation's corn crop to its lowest level in almost two decades. On Friday, the U.S. Department of Agriculture cut its estimate for the corn crop by nearly 17% and raised the upper end of its price forecast by 39% to almost $9 a bushel. In its report, the USDA forecast the nation's corn yield to be about 123.4 bushels per acre -- the lowest level in 17 years.

Global alarm over a potential repeat of the 2008 food crisis escalated on Thursday after data showed food prices had jumped 6 percent last month and importers were snapping up a shriveled U.S. grain crop, helping drive corn prices to a new record.

The record drought gripping half the country will help push food prices up by 3 percent to 4 percent next year, the U.S. Department of Agriculture said Wednesday. Milk, eggs,beef, poultry and pork prices will all be affected by the drought, which has pushed up prices for feed. Beef prices are expected to see the biggest jump at 4 percent to 5 percent. Dairy product prices are forecast to climb 3.5 percent to 4.5 percent; poultry and egg prices are projected to rise 3 percent to 4 percent; and pork prices are expected to rise 2.5 percent to 3.5 percent in 2013, the agency said.